Output is on the rise despite a fall in business optimism in the West Midlands, new research shows.

BDO’s Output Index rose to 104.4 this month, up from 104.1 in July, which indicates growth in business activity.

However, researchers reported a fall in business optimism, from 103.9 to 103.2.

BDO said businesses had reacted positively to the political stability after the General Election, and increased certainty has encouraged businesses to invest and focus on their long term prospects. This is particularly true for sectors such as property and financial services which had feared policy change.

Richard Rose, partner and head of BDO in the West Midlands said: “Political certainty has bolstered short-term business confidence. The result is a thriving economy, despite global economic unrest.

“However, as business success continues to exceed other markets, the strong pound will make it harder for our exporters – particularly manufacturers – to find customers. We can’t let confidence tip over into complacency; keeping us competitive should be a government priority.”

Mr Rose said while optimism had fallen it was significantly above the long-term trend.

He said it showed UK was pulling ahead from others in the eurozone.