Business leaders say West Midlands manufacturers are poised to spark a recovery from recessionary trends after a new survey revealed a rise in confidence and orders.
The Birmingham Chamber of Commerce Group’s (BCCG) quarterly economic survey shows a rise in domestic and export orders and almost two-thirds of manufacturers expect turnover to rise.
The research comes on the back of the Markit/CIPS Purchasing Managers’ Index revealing that production across the UK grew at its fastest pace for 10 months in March.
However, there was a slight fall in sales in the first quarter of 2012 among the businesses surveyed by Birmingham Chamber on behalf of the Greater Birmingham and Solihull Local Enterprise Partnership.
Andy Street, who chairs the LEP, said: “It is encouraging to see local companies doing well overseas, as we need to ensure the area is competing internationally as well as in the domestic marketplace.
“Manufacturers continued to show growth and are optimistic of future increases in sales.
"This sector should be further supported by the launch of the Advanced Manufacturing Supply Chain Initiative, which will provide loans and grants to help increase capacity in key sectors and attract international companies to establish operations here.
“This latest quarterly economic survey also appears to reinforce encouraging PMI data for the West Midlands, which suggests we are bucking the trend and performing better than other regions both at home and abroad.”
Researchers for the chamber found that although sales were slightly down, from 44 per cent to 41 per cent, companies reported increased advance domestic orders rose from 39 per cent to 41 per cent while export orders were also up, from 41 to 42 per cent.
A total of 60 per cent of manufacturers, an increase of four per cent on the previous quarter, said they were confident that turnover will improve while 58 per cent, up from 54 per cent, said they expected profitability to rise.
However, it was not all positive news for manufacturers, with only 37 per cent of respondents from the production sector working at full capacity, a significant drop from 51 per cent in the last quarter of 2011.
The picture was brighter in the service sector with 50 per cent at full capacity compared with 46 per cent.
Home and export sales in the service sector remained static but optimism that fortunes would improved over the next 12 months were high. Sixty-six per cent expected turnover to improve and 64 per cent were confident profitability would be increase.
Michael Ward, president of the chamber, said: “We are delighted to see confidence returning, especially in the service sector.
“But few companies have increased their labour force over the past three months and it is worrying the numbers attempting to recruit are extremely low, with only 30 per cent in the service sector and 27 per cent of manufacturers expecting to increase their workforce over the next three months.”
