As Manufacturing Week launches today, a new national business survey on behalf of Advantage West Midlands reveals that manufacturing companies in the region are more positive about the business climate in the coming year compared to other sectors.
With 31 per cent expecting the business climate to improve and 40 per cent believing it will remain stable, the optimism is based on better exchange rates helping exporters and improved demand.
Manufacturing optimism was shared by the financial/business services sector in the West Midlands, with 32 per cent expecting the business climate to improve and 42 per cent believing it will remain stable.
The National Business Survey (NBS) of over 5,300 businesses nationwide by Ipsos MORI on behalf of England's Regional Development Agency (RDA) network and Invest Northern Ireland is the largest of its kind, asking businesses about their performance, opportunities and issues.
Mick Laverty, Chief Executive at Advantage West Midlands, said: "This region has been hit the hardest during this recession but I welcome the news that this survey reinforces the feedback that RDAs are receiving from businesses throughout England - that companies, and manufacturers in particular, are seeing the first stages of recovery.
"The role of RDAs is to support business and provide the conditions in which they can grow. We have worked closely with businesses over the last decade, paying close attention to their needs and implementing bespoke support where we can, including support to help them innovate their products and services and diversify their customers and suppliers."
The NBS highlights the tough conditions that businesses in the West Midlands are facing with half (51%) reporting a deterioration in business performance in the last 12 months.
However, there are signs of improvement with evidence that businesses are performing better now than they were six months ago.
21% of businesses reported that their business performance improved over the past 12 months, compared to 14% in June 2009.
The hotel and catering sector had the best performance, while firms in construction and retail/distribution fared the worse.
The improved business performance is reinforced by the increased number of businesses reporting higher orders, output, profit margins and cash-flow in the past 12 months – although this is yet to reach the level of November 2008.
Many businesses have been struggling to survive the recession and while there are signs of a fragile economic recovery, a third of businesses say they would not be well placed to weather a further downturn.
The majority of businesses are still coming under pressure to reduce prices (64%), experiencing a higher level of price competition (63%) and delayed payments from customers (51%) – with the construction industry feeling this most acutely.
However many are now taking positive action to help them cope.
70% pursued new markets and customers in the past year (with a similar proportion expecting to do so in the next year).
Although many business have reduced staff numbers (44%) and working hours (39%), fewer intend to do so in the next year.
View full details of of the NBS report.