The survey, which is delivered in partnership with Prime Accountants Group and measures how business owners are feeling, is analysed by the Business Intelligence Service at Warwickshire County Council.

From the responses of businesses across the service and manufacturing sectors, it gives scores out of 100 where anything above 50 indicates growth and anything below 50 is negative.

It looks at a range of aspects of doing business in the region, including the outlook for employment, investment, confidence, and current and future order books for both domestic and overseas sales.

The survey showed and improvement in domestic sales in the both the services and manufacturing sectors, and growth in overseas sales in manufacturing.

Manufacturing, generally, saw improvements in investment and cashflow, as well as the outlook for employment.

The services sector, however, saw a drop in all of those measures and a general dip in confidence.

Crucially, confidence in both services and manufacturing is above the 50-point mark, which is an indicator of growth and puts the region ahead of the national average.

Corin Crane, chief executive of Coventry and Warwickshire Chamber of Commerce, said: “There was a sense of growing confidence at the start of the year but as we conducted this survey, events in the Middle East were starting to dominate headlines and there is no doubt that was already starting to weigh on business sentiment.

“Companies across the region have started almost every year over the past decade hoping for stability and certainty and have had the rug pulled from underneath them every time. It feels as though it’s happening again.

“Our plea to Government is to do all it can to accelerate its policies on growth – from planning to skills – in order to squeeze every bit of growth we can out of the domestic economy.

“But, we all acknowledge that global events will continue to impact what happens here in Coventry and Warwickshire, where we remain ahead of the national average when it comes to the economic outlook.”

Steve Harcourt, director of Prime Accountants Group, said: “Despite early-year global instability and declining sentiment in the services sector, the Coventry and Warwickshire economy continues to outperform national averages. Manufacturing is driving much of the positive momentum, with domestic and overseas activity improving sharply.

“These latest QES results show just how resilient businesses across Coventry and Warwickshire continue to be in the face of significant uncertainty. While the services sector has clearly felt the pressure of rising costs and wavering confidence, it is encouraging to see such a strong resurgence in manufacturing – particularly in domestic and export sales.

“Investment and cashflow remain areas of concern for firms of all sizes, and it’s vital that we maintain a stable environment that supports long‑term planning. Despite global challenges, our region continues to outperform national trends, demonstrating the strength, adaptability, and determination of our local business community.”

Todd Williams, Business Intelligence Analyst (Economy and Skills) at Warwickshire County Council, said: “Quarter one at a national level rose modestly primarily due to an increase in domestic services output, alongside a general increase in orders for the manufacturing sector.

“Nonetheless, overseas demand for services remains weak – particularly in Europe. Employment at the national level dropped for the 17th consecutive month in both manufacturing and services, whilst the services sector implicated AI in the ongoing employment reduction during a period of increasing sales.

“Meanwhile, the latest QES results shows a different picture for the local economy. Local sentiment around domestic sales for the services sector remain positive. However, domestic sales for the local manufacturing sector have rebounded strongly.

“Overall investment showed continued weakness, alongside cashflow for both sectors. Potentially related to the JLR shutdown, cashflow for the local manufacturing sector remained extremely weak in Q1 after retracting sharply in Q4.

“Local concerns around labour costs remain significant for both the services and manufacturing sectors, with the manufacturing sector also being very concerned about raw material costs and utilities. Business rates are now a significant concern for both the services and manufacturing sectors.

“Local recruitment efforts are strong, with the majority experiencing recruitment difficulties. Just over half of local manufacturing and service sector respondents indicate that they are currently operating below full capacity.

“The results show that the overall economic outlook index for Coventry and Warwickshire exceeding the national trend in many ways. Nevertheless, very weak local sentiments around both manufacturing and exports are a significant concern.”

Economic Outlook:

Overall, 53.5, down from 56.2

Service Sector 52.6, down from 57.2

Manufacturing Sector 58.9, up from 47.2

Domestic Sales:

Service Sector 53.3, up from 52.8

Manufacturing Sector 58.9, up from 44.3

Overseas Sales:

Service Sector 45.4, flat from 45.8

Manufacturing Sector 50.0, up from 36.5

Employment 

Service Sector 65.2, down from 70.7

Manufacturing Sector 73.7, up from 60.0

Investment & Cashflow 

Service Sector 43.1, down from 46.0

Manufacturing Sector 43.6, up from 41.5

Business Confidence 

Service Sector 55.0, down from 65.9

Manufacturing Sector 66.7, up from 50.0