Increased orders for manufacturers are set to lead Greater Birmingham confidently into 2018 after all businesses showed “remarkable durability” in 2017, a new survey reveals.
The figures are in the final quarterly report of 2017 from Greater Birmingham Chambers of Commerce (GBCC) but uncertainty over the future direction on the local economy persists.
In the light of that, the GBCC has called on the Government to demonstrate they are on the side of the business community.
The report is produced by the GBCC in conjunction with Birmingham City University and will be discussed at a launch breakfast at the BCU on Tuesday, January 16 (7.30am-9.30am)
Respondents in both the manufacturing and service sectors reported strong performances in domestic and export sales and looking ahead to next year the overall balance score (*see below) for advanced export orders rose from 60 to 62.
And there was encouraging news on the skills front. The balance score of the number of firms from all sectors reporting an increased workforce rose from 58 per cent to 61
The domestic demand balance rose by one point to 69 – the highest figure seen since the start of the year. Fifty per cent of firms in both sectors combined recorded an increase in their domestic sales, with 12 per cent reporting a drop in their UK sales, down from the previous figure of 16 per cent.
However, there were acute differences in the individual sectors. Service firms saw a two-point increase in the balance score for UK sales, as the number of companies reporting decreased domestic sales fell from 16 per cent to 11 per cent.
The manufacturing balance score for domestic sales revealed a two-point drop as a higher percentage of firms reported a downturn in their UK output (up from 14 per cent in Q3 to 18 per cent in the current quarter).
In terms of domestic orders, the balance figure for firms in the two sectors combined remained at a healthy 67, mainly predicated on manufacturers in particular expecting a rise in their advance orders heading into the first quarter of 2018.
Paul Faulkner, chief executive of the GBCC, said: “The year brought both unexpected and expected political and economic developments, in the form of a snap General Election, continued fallout from Brexit negotiations and the first interest rate rise in almost a decade.
“Throughout it all, our firms continue to demonstrate a remarkable durability in light of ongoing uncertainty.
“The latest results revealed that healthy levels of domestic and international output were upheld as we head into the New Year. It was pleasing to see concerns over accessing the right talent lessen and a slight upturn in the levels that firms were investing in training their staff.
“And strong projections around profitability and turnover were also maintained as firms across Greater Birmingham continue to exhibit an air of optimism.”
Professor Julian Beer, deputy vice-chancellor of the BCU, said: “Overall, the QBR indicates some recent firming from the previous three quarters’ weakening, but still off the equivalent 2016 quarter’s highs. Nevertheless, the local economy remains in positive territory.
“While over half of all firms indicated increased recruitment demand (actual and intended), manufacturers reported difficulties recruiting sufficient skilled and technical staff. Further, services sector firms reported similar problems in attracting professional and managerial candidates.
“Price pressures were also seen by both sectors as tightening, with raw material inputs a key concern for manufacturers. Following three quarters of slackening performance, the pick-up recorded this quarter tentatively suggests that going into 2018 Birmingham growth prospects are favourable.”
Raj Kandola, senior policy and patron adviser at the GBCC, said: “The political and economic arena remains in a state of flux – now is the time for Government to demonstrate they are on the side of the business community
“A number of our members cited concerns over competition as an impediment on business growth and it is vital that the spectre of Brexit does not detract from the Government’s objective to enhance the competitiveness of the domestic economy.
“Although we broadly welcome the Chancellor’s plans to modernise the administration of business rates, a more radical overhaul of the rating system would actually create a solid platform for our firms to flourish.
“We will continue to partner with the British Chambers of Commerce in calling for systematic reform of the business tax system in a bid to bring about sustained economic growth for companies across the country.”
*All statistics are percentage balances from the combined manufacturing and service sectors unless otherwise stated.A score of over 50 is indicative of growth, the higher the score, the stronger the growth sentiment.
The GBCC Q4 Quarterly Business Report launch event will take place on Tuesday January 16 at Birmingham City University, The Curzon Building, 4 Cardigan Street, Birmingham, B4 7BD. The event will start at 7.30 am and finish at 9.30 am. Click on the link below to register your attendance:
