Manufacturers in Greater Birmingham are poised to spark a recovery from recessionary trends, according to a new survey published today (Thursday, April 5, 2012).
And confidence that fortunes will improve over the next 12 months continues to improve in both the manufacturing and service sectors.
The Birmingham Chamber of Commerce Group’s (BCCG) quarterly economic survey produced on behalf of the Greater Birmingham and Solihull Local Enterprise Partnership (GBSLE) shows a slight upturn in the fortunes of all businesses, especially in the manufacturing sector.
Sales and orders in the home market experienced an upward trend as did advance orders for exports. Only export sales for the past three months remained slow with just 41 per cent saying they had increased sales compared with 43 per cent in the previous quarter.
Although sales were slightly down (44 per cent to 41 per cent) on the previous quarter, the percentage balance figure increased from 21 to 25 per cent, indicating that manufacturers were not losing business.
Companies reporting increased advance domestic orders rose from 39 per cent to 41 per cent while export orders were also up, from 41 to 42 per cent.
Andy Street, who chairs the Greater Birmingham and Solihull LEP, said: “It is encouraging to see local companies doing well overseas, as we need to ensure the area is competing internationally as well as in the domestic marketplace.
“Manufacturers continued to show growth and are optimistic of future increases in sales. This sector should be further supported by the launch of the Advanced Manufacturing Supply Chain Initiative, which will provide loans and grants to help increase capacity in key sectors and attract international companies to establish operations here.
“This latest quarterly economic survey also appears to reinforce encouraging PMI data for the West Midlands, which suggests we are bucking the trend and performing better than other regions both at home and abroad.”
Sixty per cent of manufacturers, an increase of four per cent on the previous quarter, are confident that turnover will improve while 58 per cent, up from 54 per cent, said they expected profitability to rise.
Only 37 per cent of manufacturers were working at full capacity, a significant drop from 51 per cent in the last quarter of 2011, but the picture was brighter in the service sector with 50 per cent at full capacity compared with 46 per cent.
Home and export sales in the service sector remained static but optimism that fortunes would improve over the next 12 months were high.. Sixty-six per cent expected turnover to improve and 64 per cent were confident profitability would increase.
Michael Ward, president of the BCCG, said: “We are delighted to see confidence returning, especially in the service sector. But few companies have increased their labour force over the past three months and it is worrying that the numbers attempting to recruit are extremely low, with only 30 per cent in the service sector and 27 per cent of manufacturers expecting to increase their workforce over the next three months.
“This does not augur well for government attempts to reduce the number of unemployed and underlines the need for companies to be given encouragement and confidence to take on more staff through the development of favourable conditions.”