Uncertainty continues to mire economy in Coventry and Warwickshire

THE wave of events set in motion post-EU referendum is impacting business confidence across Coventry and Warwickshire.

While the run-up to the vote had been a period of uncertainty, little appears to have changed in the subsequent weeks, with the effect of Brexit and the political fall-out still unclear.

It was against this backdrop that the Coventry and Warwickshire Chamber of Commerce carried out its second quarterly economic survey of 2016.

Its findings were that while more than half of businesses in both manufacturing and services still expect turnover to rise in the coming 12 months, the level was down on the previous quarter.

In the service sector, 54% of companies expect turnover to go up, with 41.4% thinking it will remain the same. Just 4.6% felt it would decrease.

In manufacturing, more than half (50.6%) of firms are anticipating a rise in turnover, with 39.5% saying it will stay the same. Just 10% believe it will drop.

The overall figure for the previous quarter saw 73% of firms forecasting a rise in turnover.

On the employment front, 25.9% of businesses in service sector are expecting to increase headcount, with 72.8% saying it is likely to stay the same and 1.2% saying it will fall.

In manufacturing, 27.5% predict taking on more people, with 68.8% saying it would remain constant. Just 3.8% said they were expecting to reduce the number of staff.

Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said the build-up to the referendum had caused uncertainty.

She said: “We heard from members in the weeks leading up to the referendum that decisions were being put on hold until the vote had taken place and I believe that can explain the fall in the number of businesses expecting turnover and headcount to rise.

“Equally, there wasn’t too much alarm – with only a very small number of firms expecting to have to cut headcount.

“What we don’t know, yet, is the effect Brexit has had on confidence in Coventry and Warwickshire and, actually, I think for most firms it’s still too early to say.”

She said the political landscape was only now starting to settle down and the markets were still searching for a new ‘normal’.

“Anecdotally, some companies are telling us again that the uncertainty of what our future with the EU looks like is unhelpful,” she added.

“We need strong leadership in negotiations with the EU that satisfy the democratic decision to leave but also ensure we have the best possible trading relationship with such a hugely important market.”