Service industries upbeat but manufacturer confidence sliding says latest survey
In its latest quarterly economic survey, the Coventry and Warwickshire Chamber of Commerce has seen an uptick in the mood of service industries, offsetting the pessimism of an EU-dependent manufacturing sector.
The chamber said that it shows an overall improvement in the business outlook for the region in the first quarter of 2019 compared to the last quarter of 2018.
However with Brexit still hanging over the heads of UK plc, it found that many cross-sector businesses were holding off on investment decisions until the government had delivered more clarity about the country’s future relationship with the EU.
The survey is used as a barometer for the regional economy, and the results are converted into an index where 50 is the “pass mark” – anything above indicates a positive outlook.
In the first three months of 2019, both service-based but particularly manufacturing businesses reported a fall in domestic orders. Despite this, there was a slight rise in overseas orders among companies in the service sector.
Business confidence in the service sector jumped from an index of 69.8 to 83.6 meaning the vast majority of companies are feeling positive about the future. In manufacturing, it fell from 76 to 70.3.
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “The results show a mixed picture across the region, with differences in outlook between services and manufacturing.
“The uncertainty of where we are heading with Brexit is, possibly, weighing heavier on some in the manufacturing sector, while the service sector in the region is seeing no signs of a dip in morale.
“What is clear, however, is that the outlook in this region compares very favourably to other areas of the UK which is a further sign of the strength and robustness of our economy.
“The fact that, despite so many pressures, our outlook has actually improved means we are in a strong position to grow but it’s vital that we get clarity soon as businesses continue to hold off on investment.”
David Ayton-Hill, Economy and Skills Group Manager at Warwickshire County Council, said: “The national economic index recorded a fall in the first quarter of 2019 and, yet, our region has seen a small but important increase.
“The service sector has, largely, driven that with some pessimism among some of our manufacturers around profitability and turnover.
“Overall, we can still see that Coventry and Warwickshire is outperforming the national average – continuing a trend of the past few years.”