Confidence remains high despite ongoing Brexit uncertainty
Companies across Coventry and Warwickshire have delivered a confident outlook about their prospects – despite continuing international uncertainty.
The Coventry and Warwickshire Chamber of Commerce, in partnership with Warwickshire County Council, have conducted the first Quarterly Economic Survey (QES) of 2017 - and it reveals that optimism in the area is stronger than at the end of 2016.
The QES results, based on an Economic Outlook Index, show whether respondents feel things are getting better or worse, with a score of 50 suggesting firms feel circumstances will stay exactly the same.
Overseas orders across the region are showing particular strength – with manufacturing and service sector companies reporting growth. In manufacturing, the Index stood at 67.5 – up more than 10 points compared to the turn of the year.
Services showed a more modest increase but the Index stands at 67.6, with the lower pound being credited as the main reason for exporters from the region seeing an increase in orders.
Domestically, the figures were not quite as strong in manufacturing with the Index showing at 61.3 – still up on the previous quarter – and in services it was at 67.6 which was higher than three months ago.
In terms of overall business confidence, both manufacturing (76.0) and services (78.9) are showing a very healthy outlook with turnover being forecast to rise. Regarding employment, investment and cashflow, the Index is still positive but there were slight dips in manufacturing compared to the previous quarter.
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said companies across the patch were confident about the year ahead.
“After the Brexit vote, there was a bit of a wobble in confidence," Ms Bennett said. "But over the past few months we are seeing companies look ahead with optimism.
“They are alert to the fact that there is uncertainty but, with the outcome impossible to forecast and everything else is going on in the world, they are looking at their own businesses and their own plans for the future and they feel confident.
“We are delighted to be working with Warwickshire County Council in producing the QES and the new Economic Outlook Index makes it very easy to measure against sentiment on previous quarters. On nearly every indicator, manufacturers and service sector companies feel they are in a better place than three months ago, which bodes well.”
Warwickshire County Council economist Sam Van de Schootbrugge believes the survey provides plenty of scope for optimism.
"The Economic Outlook Index (the overall outlook for the local economy) for Quarter One 2017 is up on Quarter Four 2016," he said. "This optimism was shared equally between the manufacturing and service sectors, both of which have also increased since last quarter.
"The positive outlook is driven by a significant increase in domestic and overseas manufacturing orders in response to exchange-rate fluctuations post-referendum. Exporting services was also on the up, though domestic orders in the service sector were marginally down. Despite a contraction of domestic orders, the service sector expects to employ more people and invest more into training and recruitment.
"All-in-all the Business Confidence Index stands at a very healthy level, up 16% on 2016 for manufacturers and 2% for those in the service sector. This confidence resembles the higher-than-expected UK-wide economic growth. However, consumer spending has slowed in the last quarter, so it will be interesting to see the impact on businesses in the next survey.
"The second half of the QES handles more specific questions related to Coventry and Warwickshire’s businesses and there was a focus towards barriers to growth and business support in this quarter’s edition with the aim of better understanding the problems which businesses face locally. This innovative and unique approach to the Coventry & Warwickshire Chamber of Commerce QES allows policy-makers to more effectively channel resources towards promoting business growth."
* Every business can play an important part in the compilation of the next QES by filling in this questionnaire: https://www.surveymonkey.co.uk/r/warkscountycouncil
"We would urge all business to take up this important opportunity to provide real-time intelligence and feedback on how their business is doing," said Mr de Schootbrugge. "The information will be used to shape and inform policy so is a really important way for businesses to get involved."