Black Country manufacturers put out the warning signs

THE latest Quarterly Economic Survey report for the Black Country paints a bleak picture of the manufacturing sector.

Against a backdrop of falling exports, the number of Black Country manufacturers who reported an increase in their workforce has declined 9% since last quarter and there has been a 12% drop in the same companies’ expectations for the next three months

Cashflow for both manufacturing and service sector companies has increased by 12% and 23% respectively but investment in equipment has declined by 20% and 7%.

Investment in training has increased by 5% for manufacturing companies but has declined 15% for the service sector.

And business confidence – measured by turnover expectations over the next 12 months – has declined by 18% for manufacturers and 13% for service sector organisations.

Nevertheless more than half of manufacturing and two-thirds of service sector responses expect turnover to increase over the next 12 months.

But expectations that profitability will improve over the next 12 months amongst manufacturers has dropped by half since its peak at the end of 2013.

Some 81% of manufacturing companies and 49% of service sector companies are operating below capacity.

Commenting on the results, Black Country Chamber of Commerce president Ninder Johal said:  “At the start of 2014 we were reporting high levels of optimism, growth and sales. It is disappointing to see exports decline so quickly.

“I understand that the European and Russian markets have collapsed for different reasons and that there is a slowdown in China.

“Nevertheless, Brand Britain still counts across the world and our Export Expert programme will help identify new opportunities.

“These results suggest that any economic recovery being reported is not being driven by business investment. We have seen the dangers of consumer-led bubbles in the past and yet newspaper reports suggest that underneath the rhetoric of deficit reduction and high growth lies a very dangerous set of assumptions behind how far consumers are prepared to go to supplement their falling standards of living.

“We have set out how £17bn can be added to the Black Country economy and we invite local decision makers to help us realise this aim.”

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