The West Midlands is fighting back, according to a new survey.
It claims firms added to their workforces for the first time in over a year as business activity picked up.
Commenting on the release of July's PMI Business Survey data, produced for the Royal Bank of Scotland by NTC Economics, RBS economist Julien Seetharamdoo said: "The latest acceleration in output growth across the West Midlands brought the rate of expansion above the UK average in July.
"Total business activity increased at the fastest monthly pace for over two years, supported by the strength of new orders.
"Capacity was sufficiently tested to encourage firms to raise recruitment during the month, resulting in average workforces expanding for the first time in over a year.
"However, the region continued to face greater input cost pressures than other regions, with input price inflation the second-highest to date."
The report pointed to a further strong improvement in business conditions in the region's private sector.
The seasonally adjusted Business Activity Index rose slightly to 58.4 in July from 58.0 in June, signalling the steepest increase in output for over two years.
It followed further gains in new business, and improved productivity.
The report stated: "Data showed that manufacturing output growth outpaced that of services in July.
"Incoming new business in the West Midlands increased for the fortieth month in succession in July.
"Moreover, the rate of growth was significant and above the UK average for the first time since May 2005.
"Backlogs of work continued to decline in July, reflecting further productivity gains. The rate of contraction eased since last month, however."
The private sector workforce in the West Midlands expanded slightly, the first growth since June 2005. However, a decline in manufacturing employment was registered as the majority of new jobs were created in services.
Input price inflation eased in July from June's high, but was still the second-highest indicated to date.
Chief economist Trevor Williams said: "It is encouraging for economic growth going forward that consumers feel their job security has improved, which could reflect strong rises in employment over the past year, something that has been masked by disappointing labour market statistics.
"Faster economic growth suggests that employment gains can continue and that job confidence should strengthen further in the months ahead."