The overall economic outlook for Coventry and Warwickshire has taken a tumble, according to a new survey of companies in the region.
Coventry and Warwickshire Chamber of Commerce’s latest Quarterly Economic Survey (QES) – which is completed by businesses across the city and the county – showed a decrease in positivity compared to the previous quarter.
The survey, which is delivered in partnership with Prime Accountants Group, is analysed by the Economy & Skills Group at Warwickshire County Council. From the responses of businesses across the services and manufacturing sector, it gives scores out of 100 where anything above 50 is positive and below is negative.
In both services and manufacturing the overall outlook dropped creating an overall economic outlook of 50.6 compared to 55.3 in the previous quarter. It means the regional economy is still in positive territory, but only just.
The reduction is due to falls in domestic sales, which have dropped below 50 in the service sector to 48.5 and are down from 60.2 to 55.9 in manufacturing, while investment & cashflow has dropped to 45.2 in the service sector and is right down to 39.0 in manufacturing.
An increase in export sales was cause for some cheer, particularly in manufacturing where it rose to 57.7 from 48.5.
On the employment side, the service sector was down from 56.4 to 51.6 and in manufacturing it dropped from 65.9 to 54.4 meaning a slightly less positive picture regarding recruitment intentions.
Of those companies looking to recruit, 84 per cent of businesses in the service sector said they had experienced difficulties and 80 per cent of manufacturers backed up that assessment.
Confidence among businesses was still relatively strong across the region, sitting at 58.0 in the service sector and 60.3 in manufacturing.
Corin Crane, Chief Executive of Coventry and Warwickshire Chamber of Commerce, said: “Across the region, businesses are working really hard to grow and make a difference in their communities – and they continue to show incredible resilience in the face of some of the most difficult challenges our economy has faced in decades and, as a Chamber, it’s vital that we connect to businesses in as many ways possible.
“The QES provides us with an acid test of how companies are feeling and the issues they are facing. We then work with our partners to analyse those results and feed them into colleagues at the British Chambers of Commerce.
“What we can see right now is that the regional economy is finely balanced – still in positive territory, but only just. We know there are strong ambitions to grow but, with interest rates rising, inflation stubbornly high and a recruitment crunch, it is tough.
“We’d urge businesses in need of support to get in touch with the team at the Chamber to help them to grow and continue the amazing work they are doing.”
Steve Harcourt, of Prime Accountants Group, said: “There is a really mixed picture in Coventry and Warwickshire. When you look at business confidence in both the services and manufacturing sectors, the region is still in positive territory, which underlines how well firms across the city and county have held up despite the variety of challenges they’ve faced over the past three years.
“Trading conditions remain tough but there is still an appetite to grow among many companies right across the region and it is vitally important that we nurture that in order to continue growing the economy.”
Todd Williams, Insight Analyst (Economy & Skills) at Warwickshire County Council, said: “Quarter two at a national level remained flat as inflation persists and concerns over interest rates are growing, while recruiting difficulties continue.
“However, the latest QES results show the local economy maintaining optimism despite the ongoing economic adversity.
“The results show that the overall economic outlook index for Coventry and Warwickshire contrasts the national trend with local manufacturing businesses remaining optimistic versus a national pessimism, while local service businesses are less optimistic than the national average.
“While there are local short-term concerns, especially cash flow for manufacturing businesses and ongoing pessimism for exporting services, both the local manufacturing and service sectors show confidence that business is expected to improve over the next 12 months.”
Pictured: Steve Harcourt (left) with Corin Crane