The run-up to the EU referendum was a slight drag on business confidence in Coventry and Warwickshire – but the effect of Brexit and the political fall-out is still not clear.
The Coventry and Warwickshire Chamber of Commerce carried out its second quarterly economic survey of 2016 ahead of the referendum and the results have just emerged.
While more than half of businesses in both manufacturing and services still expected turnover to rise in the coming 12 months, it was down on the previous quarter.
In the service sector, 54 per cent of companies expected turnover to go up, 41.4 per cent thought it would remain the same while only 4.6 per cent felt it would decrease.
In manufacturing, 50.6 per cent of firms were anticipating a rise in turnover, 39.5 per cent said it would stay the same and 10 per cent believe it will drop.
The overall figure for the previous quarter saw 73 per cent of firms forecast a rise in turnover.
On the employment front, 25.9 per cent of businesses in service sector were expecting to increase headcount, 72.8 per cent thought it would stay the same and 1.2 per cent said it would fall.
In manufacturing, 27.5 per cent predicted taking on more people, 68.8 per cent said it would remain constant and 3.8 per cent were expecting to reduce the number of staff.
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said the build-up to the referendum had caused uncertainty.
She said: “We heard from members in the weeks leading up to the referendum that decisions were being put on hold until the vote had taken place and I believe that can explain the fall in the number of businesses expecting turnover and headcount to rise.
“Equally, there wasn’t too much alarm – with only a very small number of firms expecting to have to cut headcount.
“What we don’t know, yet, is the effect Brexit has had on confidence in Coventry and Warwickshire and, actually, I think for most firms it’s still too early to say.
“The political landscape is only starting to settle down and the markets are still searching for a new ‘normal’.
“Anecdotally, some companies are telling us again that the uncertainty of what our future with the EU looks like is unhelpful.
“We need strong leadership in those negotiations with the EU that satisfies the democratic decision to leave but also ensures we have the best possible trading relationship with such a hugely important market to ensure businesses can Go For Growth.
“Our next QES, therefore, will be one of the most interesting we have conducted.”