Businesses in Coventry and Warwickshire are coming into 2020 with renewed confidence – despite an overall dip in the economic outlook for the region.
The results of the Coventry and Warwickshire Chamber of Commerce’s final Quarterly Economic Survey (QES) of 2019 have been revealed and show that firms in both the service and manufacturing sector were more positive about the future than in the three months previous.
That was against a backdrop of slight decreases in domestic and overseas orders as well as a fall in employment prospects, leading to a slight downgrade in the overall economic picture.
However, the survey, which is partnered by Prime Accountants and analysed by Warwickshire County Council, providing a barometer for the regional economy, showed that Coventry and Warwickshire is still considerably above the national average when it comes to economic performance.
Warwickshire County Council’s analysis uses a similar score to the national Markits Purchasing Managers Index (PMI) where 50 is the balance and anything above means the majority feel positive and anything below means the reverse.
Using that format, confidence in the service sector rose from 72.2 to 74.7 and in manufacturing it was up from 61.8 to 65.4 compared to the previous quarter.
Domestic orders in manufacturing went down from 56.5 to 55.2 and overseas orders fell from 56.1 to 52.4. In the service sector, domestic orders went from 62.4 to 61.1 and overseas orders dropped from 53.9 to 50.9.
All of that data led to an overall economic outlook score of 60.8 for Coventry and Warwickshire – still way above the balance figure of 50 and the national average – but slightly down on the score of 61 which was recorded in the third quarter of 2019.
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said firms were cautiously optimistic at the start of the new decade but that the new Government must prioritise economic growth and create greater certainty for business.
She said: “The latest Quarterly Economic Survey results reflect what has been a period of uncertainty for companies across Coventry and Warwickshire, making it difficult to plan for the future.
“The end of 2019 brought a new Government and, with it, a degree of certainty about the future direction of the country. This must now be backed up by policy that delivers real incentives to firms to invest and grow and remove some of those up-front costs from doing business.
“We need investment in infrastructure and a strategy for overseas trade – both with the EU and beyond.
“So while the economic outlook for Coventry and Warwickshire saw the slightest of falls it is encouraging to see that confidence is beginning to pick up and it is vital that the seeds of that optimism are nurtured in the coming weeks and months.
“We will be working with businesses in the region to support their growth and will continue to be their voice to decision-makers in order to ensure that the needs and aspirations of companies across Coventry and Warwickshire are heard.”
Steve Harcourt, Director Prime Accountants Group, said: “As predicted in the previous quarter, the final three months of 2019’s economic results for Coventry and Warwickshire have shown a dip in all areas of the survey apart from ongoing and future business confidence.
“That was due, in most part, to businesses telling us that they are working at full capacity, giving them an optimism of profitability for the coming year. A lot of the uncertainties in the economy due to the delay of Brexit and a Winter General Election have now passed and businesses are looking forward with greater optimism.
“The first Budget of the new Government is crucial for this business optimism to continue, so we are looking forward to Budget day on March 11 to provide the tax friendly incentives and policies to help business in the region to flourish and grow.
“The economic outlook index in Coventry and Warwickshire still remains considerably higher than the national average, indicating we have a strong and vibrant local business community in the region.”