The recovery being experienced by Midland manufacturers has been confirmed by the latest economic survey by Greater Birmingham Chambers of Commerce, which revealed sales both home and abroad have increased to levels not seen for 18 months.
The chamber’s quarterly economic survey for the third quarter of 2015 found half of businesses increased sales and orders over the past three months.
The survey, supported by recruitment and people development agency Katie Bard, echoes the positive outlook in the recent Manufacturing Outlook survey from EEF, the manufacturers’ organisation, and global law firm DLA Piper.
The chamber survey showed manufacturers increased home market sales to 50 per cent, up 10 per cent from the previous quarter.
Orders were also buoyant with 52 per cent reporting an increase from 37 per cent in the previous quarter.
Manufacturers who increased export sales rose from 35 per cent to 50 per cent and those increasing orders were also up to 50 per cent from 36 per cent.
In addition an increasing number of manufacturers are taking on more staff. Forty-four per cent said they had increased their workforce in the past three months with 43 per cent expecting to do so in the next three months.
But the skills shortage was still evident with 75 per cent of companies saying that they had experienced difficulties in recruitment.
Paul Faulkner, chief executive of the GBCC, said: “Sales figures are extremely encouraging but we must retain a sense of proportion because we are starting from the low levels we experienced in the middle of the downturn.
“The fact that we are creating more jobs shows that confidence is slowly returning to business and reflects improving employment figures across the region.
“Our own experience through the Chamber Skills Hub we created 12 months ago is that there are many young people with the skills to make a positive entry into the workplace using vocational learning.
“More and more employers are finding that as their workforce ages, there is a real requirement to address a succession plan. And it’s incumbent on employers to understand their training needs and how they can start to address them.”
The number of manufacturers confident turnover would improve in the next 12 months was down slightly to 64 per cent from 66 per cent but far more (71 per cent against 54 per cent in the previous quarter) expected profitability to improve.
Service industries reporting increased UK sales were up slightly (45 per cent against 40 per cent) while orders in the home market reached 34 per cent against 32 per cent.
Export figures were also static with firms increasing sales and orders in both fields up by only two per cent to 27 per cent.
Thirty-three per cent of firms increased their workforces in the service sector over the past three months and 44 per cent predicted they would increase theirs over the next three months.
But, like manufacturers, the service sector was struggling to find the right personnel. Seventy per cent said they had experienced difficulties in recruitment, a slight improvement on the previous quarter.
Confidence figures have remained constant this year with 61 per cent anticipating an improvement in turnover in the next 12 months and 57 per cent expecting profitability to rise.
Seventy-one per cent said they were working below full capacity.
Mr Faulkner added: “Confidence is still very fragile and mixed but generally manufacturers are optimistic about the future, probably encouraged by the fact that 57 per cent, against 30 per cent in the second quarter, were working at full capacity.
“However, there are worrying trends in the service sector as 71 per cent said they were working below full capacity.”