Manufacturers across the West Midlands have enjoyed a sales surge in the first three months of 2016 with nearly half reporting turnover on the rise, according to new research.
Figures in the first quarterly business report for 2016, published by Greater Birmingham Chambers of Commerce, show that 46 per cent of manufacturers saw sales jump in the first quarter compared with 31 per cent in the last three months of 2015.
Business leaders in Birmingham welcomed the trends but said they remained cautious over prospects for the year ahead due to lower forecasts for both UK and global growth.
The report comes as the region's manufacturing industry was dealt another blow with the news this week that Tata Steel was looking to sell its UK arm, including factories in Walsall and Wednesbury.
The report, which is supported by recruitment agency Katie Bard, showed that 35 per cent of manufacturing firms said they had increased their workforce compared with 27 per cent in the autumn quarter for 2015.
And recruitment difficulties for manufacturers were also easing in line with the jobs boost, it said.
Three months ago job hiring problems were at a record high, with 89 per cent of firms facing difficulties attracting skilled workers.
The figure for manufacturers has now fallen to 56 per cent, with candidates often failing to have the necessary skills or qualifications or adequate levels of experience, the chamber's research suggests.
The figure was more mixed in the service sector, with 63 per cent still facing difficulties recruiting, the same percentage as the previous quarter.
Confidence over sales and profits was also up in the manufacturing sector, with 65 per cent of firms optimistic for an increase in turnover over the next year, a substantial rise from the 45 per cent figure in the last quarter of 2015.
The equivalent figures for profits were 56 per cent this quarter compared to 37 per cent in the autumn.
In the service sector, 48 per cent of respondents said sales had increased in the UK market, with the equivalent figure for exports 24 per cent.
Stephanie Wall, the chamber's policy and patron adviser, said: "We are pleased to see sales, recruitment and business confidence have improved for greater Birmingham manufacturers in quarter one.
"We nevertheless remain cautious of business conditions in the year ahead which look to remain challenging. Forecasts for both UK and global growth have been reduced to two per cent and 3.4 per cent respectively.
"Slower growth naturally impacts trade, which we would expect to be weaker given these forecasts in the year ahead."