Business confidence in export markets growing in the West Midlands
BUSINESS confidence in the export market is growing according to the latest survey by West Midlands Chambers of Commerce.
The economic survey for the first quarter of this year shows that 40% of firms in the service sector reported an increase in overseas sales and 39% reported an increase in foreign advance orders. This is an 8% improvement on Q4 2012, which showed that 32% reported an increase in overseas sales.
The figures are not as positive for manufacturing companies as 33% reported an increase in foreign sales and 32% reported an increase in foreign advance orders. However, while a third of manufacturers are not seeing a rise in overseas sales, none are reporting a fall in sales.
“We are moving in the right direction as companies in the West Midlands increasingly turn to overseas trade to improve their fortunes,” said Mike Ashton, spokesman for the WMCC.
The service sector is performing well on the domestic front with 42% of firms reporting an increase in UK sales. A similar number (38%) report an increase in advance orders.
“What is still difficult for companies is recruitment of skilled labour, despite the West Midlands having higher than the UK average unemployed at 6.1%. While we need to address the lack of the right skills, the reduction of £2,000 employer’s NI contributions, per employee will mean that more SMEs can take on more staff,” added Ashton.
“Exchange rates are the biggest concern for manufacturers but competition is the biggest concern for the service sector which demonstrates a healthier economy.”
Both sectors comment that high inflation is the biggest concern with 19% of companies in the service sector saying it is a major issue.
“The 2% cap on inflation is helping diminish this concern. The announcement by the Chancellor in this year’s Budget that capital investment plans will increase by £3bn per year from 2015 will help boost manufacturing. However, bringing this date forward by at least a year would provide a better stimulus for businesses,” added Ashton.
