Confidence still high despite niggling uncertainty over Brexit

Business confidence in Coventry and Warwickshire has taken a small dip but remains positive and stronger than the national average, according to a major survey.

The Coventry and Warwickshire Chamber of Commerce’s latest Quarterly Economic Survey (QES), in conjunction with Warwickshire County Council, has revealed a second successive fall in the economic outlook for the region.

The QES, which feeds into the national British Chambers of Commerce survey, acts as a barometer for the economy across the city and the county. The results are calculated and given an index rating where 50 is a balance between growth and retraction – so anything above means the majority of respondents are feeling positive.

In the last quarter, the manufacturing sector reported a fall in both domestic orders and overseas orders, while the service sector also saw a decline in overseas sales. But there was positive news in the service sector, as domestic orders rose again from 65.2 to 66.1 after a small fall in the first quarter of 2018.

The index on employment saw a fall in both the service and manufacturing sectors from 61.0 to 59.5 in the service industry and from 68.1 to 67.5 in manufacturing.

There was an improvement in investment in both training and equipment in the manufacturing sector but a dip in the service sector.

All in all, it led to the overall business confidence index falling from 77.6 to 76.5 in the service sector and from 83.8 to 78.1 in manufacturing.

David Ayton-Hill, Economy & Skills Group Manager at Warwickshire County Council, said: “The changes reported in the results do not lead to any immediate concerns over business activity within Coventry and Warwickshire.

"It is perhaps worth noting that this quarter there has been a marked increase in businesses highlighting uncertainty over Brexit as a key area of concern. Economic theory highlights the importance of certainty and stable conditions to promote and stimulate business investment and confidence.

“Until there is more clarity around the Brexit negotiations, it is likely that we will continue to see some downward pressures on these indices, particularly the elements that are looking at future market opportunities and conditions.”

Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “The QES is a great gauge of how businesses are feeling across our patch and the results bear out what we are hearing anecdotally from companies.

“There is still confidence and optimism in this region – which is why the index is still positive and way ahead of the national picture – but there is also an element of uncertainty creeping in which has seen the index drop slightly.

“It’s important to recognise that there is still strong confidence in the region and that companies, generally, have a positive outlook about doing business here. But, equally, as a Chamber we will continue to give firms as much support as possible to help them grow either through getting out there and meeting potential new clients and, also, supporting and advising them on opportunities that are out there.”