Business outlook still positive despite a dip

The business outlook in Coventry and Warwickshire took a dip in the second quarter of the year according to a new survey.

The Coventry and Warwickshire Chamber of Commerce’s latest Quarterly Economic Survey (QES) saw sentiment in the services and manufacturing sectors take a tumble.

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 services 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 orderbooks for both domestic and overseas sales.

And, while confidence in the services sector fell from a score of 62.7 to 52.6, in manufacturing it rose from 56.3 up to 63.9.

Domestic sales were down across the board, as was overseas trade.

The prospects for employment slipped from a score of 67.7 in the service sector to 61.0 while in manufacturing it went from 72.7 down to 66.7.

There was a small ray of light when it comes to investment and cashflow in manufacturing with a fractional rise from 51.1 to 52.0.

Overall, it left the business outlook for Coventry and Warwickshire with a score of 50.3 – which is markedly down from 57.0 in the first quarter of the year.

Corin Crane, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “The survey backs up what we’re hearing anecdotally – that these are uncertain times for business.

“Any survey captures a snapshot in time and the world is evolving and moving so quickly that it is really difficult for firms to keep track.

“While businesses are having to absorb the increased costs of National Insurance, there has been very positive news with the publication of the Trade Strategy and the Industrial Strategy.

“For many years, we’ve called for Governments to deliver long term plans rather than short term fixes so they are very welcome from that point of view.

“But, what our QES shows, is that businesses do need help in the short term to get through this period.”

Steve Harcourt, president of the Chamber and director of Prime Accountants Group, added: “Businesses and business leaders in the region have always had to be resilient and able to be innovative with any challenges they face and this seems to be more prevalent during this period of change.

“I am sure with the support of the local workforce and professional support from the likes of the Chamber of Commerce, businesses will navigate the political and global changes affecting their companies, to find themselves in a stronger position in the local and national economy.”

Todd Williams, Insight Analyst at Warwickshire County Council, said: “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.

“Nevertheless, local employment is not expected to decrease, contrary to the national picture, alongside significantly lower concerns around recruitment challenges. Local business investment in training is decreasing, while local services investment in buildings and equipment is falling sharply.

“The results show that the overall economic outlook index for Coventry and Warwickshire on par with the national trend. Local and national manufacturing and services businesses remain positive about the domestic market. This may be a temporary dip in overall confidence, nevertheless weak local sentiments around exports, investment and employment remain a concern.”

To view the full Q2 QES Report, delivered in partnership with Prime Accountants Group, head to www.cw-chamber.co.uk/policy-business-representation/ quarterly-economic-survey/

Economic Outlook:

• Overall, 50.3, down from 57.0

• Service Sector 49.3, down from 57.0

• Manufacturing Sector 56.3, down from 56.9

Domestic Sales:

• Service Sector 48.3, down from 56.4

• Manufacturing Sector 50.0, down from 53.4

Overseas Sales:

• Service Sector 41.0, down from 44.5

• Manufacturing Sector 41.7, down from 50.0

Employment

• Service Sector 61.0, down from 67.7

• Manufacturing Sector 66.7, down from 72.7

Investment & Cashflow

• Service Sector 42.4, down from 48.8

• Manufacturing Sector 52.0, up from 51.1

Business Confidence

• Service Sector 52.6, down from 62.7