The latest results of the Quarterly Economic Survey (QES), carried out by the Black Country Chamber of Commerce and in partnership with the Black Country Local Enterprise Partnership (LEP), point to an improved export outlook for the region’s businesses, particularly in relation to the manufacturing sector.
To further compliment this, business confidence has risen and investment intentions have also improved, whilst exchange rates seem to be less of a concern for local businesses as the strengthening pound bounces back to its highest level since the European Union referendum.
EU negotiations have moved on from the rights of EU citizens and the financial settlement, to what a future trading relationship will look like. The guarantee of a two-year transition period has also been welcomed by exporting businesses who were concerned about a potential ‘cliff-edge’, as they can develop contingency plans through the period of implementation to protect their intricate European supply chains.
In terms of statistics, 89% of Black Country manufacturers reported either improved or constant export sales in Q1, up from 84% on the previous quarter and up from 49% in Q1 2017.
The service sector also saw improved or constant export sales at 94%, up 1% from Q4 2017 and up from 85% on the year.
In terms of profitability, 87% of manufacturers reported increased or constant expectations in Q1 2018; an 8% increase on the 79% recorded in Q4 2017 and significantly higher than the 52% reported in Q1 2017.
The service sector expressed the same profitability statistics in Q1 2018 as Q4 2017 at 89%, whilst being up on the 80% recorded 12 months ago.
Moreover, 97% of Black Country manufacturers either increased or maintained training investment levels in Q1 2018, up from 89% in Q4 2017 and up from 76% recorded in Q1 2017. 93% of service sector businesses either increased of maintained spending on training investment, slightly down on the 95% from Q4 2017 but up on the 81% recorded in Q1 2017.
Commenting on the latest QES results, Corin Crane, Chief Executive of the Black Country Chamber of Commerce, commented:
Although Brexit uncertainty dominates news headlines, it is just one of a series of concerns facing Black Country businesses. The rise in the National Living Wage and National Minimum Wage, continued difficulties around understanding and spending their apprenticeship levy, and planned business rates rises are all domestic pressures that concern our members. There is good news, however, in terms of increasing export sales and profitability for the local business community. Although the political debate around membership of the Customs Union continues to rage, it is good to see that on the ground, businesses are largely reporting more optimistic outlooks in terms of export sales.”
Stewart Towe, Chair of the Black Country LEP, added:
The Black Country has a proud heritage of selling products and services all around the world and official Regional Trade in Goods statistics from HMRC show that the West Midlands accounts for the greatest share of UK exports of all regions outside London & the South East, making up 10% of the total at a value of almost £35billion. Strong recent export growth, and an understanding of the scale of exporting locally, reflects the positivity reported in the Quarterly Economic Survey for Q1 in 2018. Combined, the evidence presented provides confidence to the region’s trading future in a post-Brexit world. As we learn more about the UK’s position outside of the EU, Black Country LEP will continue to work with partners, such as the Black Country Chamber, to ensure a seamless as possible transition for the region’s business base, with a continually growing base of exporters at the heart of this.”
For more information on the results of the Q1 2018 QES, please visit www.blackcountrychamber.co.uk/qes or call 0330 024 0820.