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Optimism in the region is on the rise
Confidence up, amazing resilience, exports holding and signs of recovery in the jobs market. Doesn’t sound like a region slowly coming out of the lockdown caused by the Covid-19 pandemic. But this is the picture from a variety of sources and on these two pages we look at some of the reports that are giving everyone optimism.
Confidence rising: Amanda Dorel
Confidence at two-year high
Business confidence in the West Midlands rose four points during April to 31 per cent, the region’s highest reading since January 2019, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
The Lloyds Bank Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
In April, companies in the West Midlands reported higher confidence in their own business prospects month-onmonth, up seven points at 31 per cent. Taken alongside their optimism in the economy, which is down two points from 30 per cent, their headline confidence reading sits at 31 per cent.
Amanda Dorel, regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “It’s promising to see confidence among businesses in the West Midlands continue to rise after a significant increase last month. The easing of some restrictions in April will, no doubt, have been a boost to many. With the further loosening of restrictions on the horizon, it’s likely that confidence will continue to rise, but we know that businesses will face challenges as they continue to adapt and get back to business as usual.
“We’ll be by the side of the region’s business community as firms build back better and set their sights on growth.”
Exporting levels rising, says economic report
By John Lamb
Export levels in the West Midlands grew slightly in the first quarter of this year despite ongoing disruption caused by the pandemic and the new requirements for trading with the EU, a Chambers of Commerce economic report has revealed.
Twenty per cent of businesses surveyed reported an increase in international sales compared to 17 percent the previous quarter. However, at a time when UK firms were getting to grips with the new EU trading arrangements, the percentage of businesses expecting their international output to increase over the next three months fell from 19 percent to 17 percent.
This is particularly evident in the manufacturing sector with 33 per cent of firms surveyed expecting their export orders to fall over the next three months compared to 23 per cent the previous quarter. On the other hand, the percentage of service firms expecting to see an increase in international sales increased from 11 per cent to 13 per cent this quarter.
In terms of UK sales, there was only a slight improvement overall in the number of firms reporting an increase at 32 per cent compared to 31 per cent in the previous quarter. This is the highest figure recorded since the start of the pandemic and contrasts starkly with the 11 per cent recorded during the first national lockdown (Q2) last year.
However, there is again a discrepancy between manufacturing and services sector firms with the number of manufacturers reporting an increase in domestic sales falling from 45 per cent in Q4 2020 to 30 per cent in Q1 2021. The percentage of service sector firms reporting an increase in UK sales rose slightly to 32 per cent from 28 per cent the previous quarter.
Business confidence has improved significantly with 62 per cent of firms expecting to experience an increase in turnover and 54 per cent of businesses reporting that their profitability was likely to increase over the course of the next three months. This is an increase of 19 per cent and 15 per cent respectively when compared to the previous quarter.
The survey, which covers the West Midlands Combined Authority area, is the most comprehensive regular report of its kind in the region. The data is collected from quarterly surveys conducted by Greater Birmingham Chambers of Commerce (GBCC), Black Country Chamber of Commerce (BCCC) and Coventry & Warwickshire Chamber of Commerce (C&WCC).
Henrietta Brealey, chief executive of the GBCC, said: “The first quarter of 2021 represented one of the most difficult periods for British exporters in recent history with firms having to get to grips with the new rules and regulations following the UK’s departure from the EU. Brexit has resulted in more red tape for businesses with many firms experiencing shortages and delays during the past three months which has pushed up the cost of exporting to the EU.
“Despite this upheaval, it is encouraging to see that the number of companies overall reporting an increase in exports rose from 17 per cent in Q4 2020 to 20 per cent in Q1 2021. However, the outlook for manufacturers’ in particular remains challenging with the number of firms expecting their export orders to increase over the next three months falling by 10 points compared to the previous quarter.
“While some short-term disruption is to be expected, it is clear that some of the issues facing businesses cannot be attributed to just teething problems and will have a permanent impact on trade. While the £20m SME Brexit support fund is a start, we would call upon the Government to increase the amount of funding available under the scheme and take a more long-term approach to supporting businesses.
“To help businesses adapt to the new requirements for trading with the EU, the GBCC, in partnership with the West Midlands Combined Authority, is running a series of free webinars and offering fully funded places on various international trade courses over the next four months. Our documentation team are also on hand to help firms with any customs and export documentation queries.”
Increase in funding needed: Henrietta Brealey
UK economy fights back as jobs market defies the Covid crisis
Positive trend: Saira Demmer
By Jess Brookes
Latest figures indicate further recovery in the jobs market, amid a pay bump for employees across the country.
According to figures released by the Office for National Statistics (ONS), from January to March 2021, the employment rate in the West Midlands rose by 0.2 per cent to 74.2 per cent and unemployment fell by 0.4 per cent to 5.7 per cent compared to the previous quarter.
Unemployment figures nationally fell at a slower pace, by 0.3 per cent, to 4.8 per cent, while employment figures rose by 0.2 per cent to 75.2 per cent.
Early estimates by the ONS also indicate that nationally, median monthly pay increased by 9.8 per cent in April, compared with the same period of the previous year.
In April, 97,000 more people across the UK were in payrolled employment when compared with March 2021.
Early estimates show that since the start of year, growth rates of payrolled employees have started to recover on the lower rates seen since the pandemic, but still remain in negative territory.
The ONS has also said that figures suggest that recovery in job vacancies available started in April as Covid restrictions began to be lifted, especially in sectors such as hospitality and entertainment.
Saira Demmer, chief executive of SF Recruitment, commented that the figures indicate further signs of recovery in the job market, but there has been some slowdown in prospective candidates.
She said: “Positive news as we see further signs of recovery in the employment market. The strong vacancy data being seen across both the Midlands and the UK means that this positive trend is likely to continue into the summer at least as businesses seek to make up for lost time.
“We are however seeing a slowdown in available talent to fill vacancies as businesses have worked hard to keep their staff engaged and well-rewarded, as evidenced by the very strong 9.8 per cent increase in median pay.
“We expect this will change once lockdown is fully eased, as some employees will start to prioritise career development over job security again, thus opening up a larger talent pool.”
