Business ‘durability’ the key to region’s success

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 and Birmingham City University but uncertainty over the future direction on the local economy persists.

In light of that, the chamber has called on the government to demonstrate it is on the side of the business community.

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 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 showed a twopoint 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 chamber, 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.”