Potential for more jobs and increasing growth in region
Business confidence in Coventry and Warwickshire was strengthened in the second quarter of the year – with the potential for more jobs and increased growth for the remainder of 2024.
The Coventry and Warwickshire Chamber of Commerce’s latest Quarterly Economic Survey (QES) – a survey of firms in both the manufacturing and service sectors across the region – saw a marked increase in the mood among local companies.
The survey, which is delivered in partnership with Prime Accountants Group, is analysed by the Economy & Skills Group at Warwickshire County Council. From the responses of businesses across the services and manufacturing sectors, it gives scores out of 100 where anything above 50 indicates growth and anything below 50 is negative. The confidence score in the service sector jumped from 70.7 to 77.1 while in manufacturing it leapt from 59.5 to 80.5 based on the sentiment from businesses.
However, the results did highlight that there are still barriers to growth with service sector companies seeing a slight dip in domestic sales and, also, a slightly weakened performance on the investment and cashflow front. In manufacturing, there were improvements across the board – from domestic sales through to international sales and from an employment point of view to investment & cashflow.
All added together, it meant the overall economic outlook for Coventry and Warwickshire had a score of 62.4, which is up from 60.1 after the first quarter of the year.
Todd Williams, Business Intelligence Analyst (Economy & Skills) at Warwickshire County Council, said: “The latest QES results show the local economy maintaining strong optimism, alongside a significant increase in spare capacity. The results show that the overall economic outlook index for Coventry and Warwickshire is exceeding the national trend. Local services businesses are positive about the domestic market, and sentiment about the services overseas market moved towards confidence. The local manufacturing business sentiment continues to strengthen around growth in both domestic and overseas markets.
“Local concerns around interest rates dropped significantly, however input costs remain a significant concern – manifesting as inflation for manufacturing and as labour costs for the service sector. Employment is expected to increase, with ongoing concerns around recruitment challenges.”
Corin Crane, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “It’s pleasing to see that the slight improvement in the outlook at the start of the year has continued as we move through 2024. The survey was undertaken before the election so the result won’t have affected confidence but it might be that firms believed there would be more stability post-election.
“They will be buoyed by the fact that inflation has fallen significantly and that there is a strong chance that interest rates will start to follow. All that said, we know that everything is still in the balance and while the latest survey is positive there are still barriers to growth that we need the new Government to help us overcome.”
Steve Harcourt, director of Prime Accountants Group and president of the Coventry and Warwickshire Chamber of Commerce, said: “The economic picture is improving with GDP growing, which pulled us out of the recession at the end of 2023 very quickly.
“Coventry and Warwickshire has a vibrant, innovative and diverse economy which means it is extremely resilient and it’s testament to the whole business community that we have pulled through difficult times.
“The latest QES shows that confidence is increasing and it’s vitally important that the new Government delivers on its promise to support businesses to achieve the growth we all want to see.”
QES, Q2 2024 summary
Economic Outlook:
Overall, 62.4, up from 60.1
Service Sector 61.9, up from 60.9.
Manufacturing Sector 65.4, up from 55.8
Domestic Sales:
Service Sector 62.0, down from 66.1.
Manufacturing Sector 62.2, up from 54.5
Overseas Sales:
Service Sector 47.1, up from 43.2
Manufacturing Sector 55.0, up from 53.1
Employment
Service Sector 59.7, up from 56.3
Manufacturing Sector 61.4, up from 56.8
Investment & Cashflow
Service Sector 53.8, down from 56.1
Manufacturing Sector 61.2, up from 53.3
Business Confidence
Service Sector 77.1, up from 70.7
Manufacturing Sector 80.5, up from 59.5