Business confidence in the West Midlands holds steady, survey says

THE latest ICAEW/Grant Thornton UK Business Confidence Monitor (BCM) shows that confidence has remained steady in the region, in contrast to the rest of the UK where it is cooling.

The BCM Confidence Index for the West Midlands stands at +36.0, and held broadly steady throughout 2014.

There are positive signals across the board but exports in the region have been damaged by economic issues in the Eurozone, which accounts for 40% of West Midlands’ overseas trade.

And while exports may be dragging down business confidence in the region, there was an overwhelming sense that turnover and domestic sales will all increase this year
 
Tom Madden, regional director for accountancy body ICAEW in the Midlands, said: “The slowdown in export growth in the West Midlands is pushing businesses in the area to rely more on domestic sales, which are currently strong.

“With inflation falling, incomes have become less squeezed, which is supporting the increase in domestic demand. The strong sales numbers are pushing up business confidence and there is a general sense of positivity in the region, but it’s important that local businesses do not become over reliant on domestic sales.

“West Midlands businesses must focus on other, non-traditional, export markets in a bid to drive continued growth.”
 
Dave Munton, regional managing partner at accountancy and advisory firm Grant Thornton, said: “Confidence remained steady throughout 2014, but we’re seeing long-term expectations become much more positive than they are in many other regions, indicating business leaders expect to see their firms flourish in future.

“Fewer businesses are finding that customer demand has become a greater challenge, which is giving them a positive outlook.
 
“The manufacturing industry in the West Midlands is likely to do particularly well in the coming year as a result of falling oil prices and a decrease in the price of industrial inputs. In addition, businesses are expecting turnover growth of 7.1% over the next year, which is impressive by any standards.”