The Coventry and Warwickshire Chamber of Commerce has published the results of its first Quarterly Economic Survey of the year – and it shows an overall improvement in the business outlook for the region compared with the last quarter of 2018.
However, it also highlights that many businesses are holding off investment decisions until there is more clarity about the future relationship with the EU.
The survey is used as a key barometer for the regional economy and also feeds into the British Chambers of Commerce’s national survey. The results are converted into an index where 50 is the balance and anything above means the majority of respondents feel positive.
In the first three months of 2019, both the manufacturing and service-based businesses reported a fall in domestic orders although it was more prominent in manufacturing. There was a slight rise in overseas orders among companies in the service sector.
Investment and cashflow dipped compared to the final quarter of 2018 as did the number of companies looking to take on new staff.
However, 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.
Taking all of that data into account, the economic outlook for the whole region compared to the final quarter of 2018 moved from 62.5 to 63.4 – a small, but not insignificant, rise according to business leaders.
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, interprets the findings of the survey, which is completed by more than 400 businesses.
He 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.”