The West Midlands’ economy is still bumping along the bottom, with manufacturing companies reporting only a small increase in domestic sales and a decrease in orders from abroad in the past quarter.
The latest figures from the West Midlands Chambers of Commerce’s (WMCC) quarterly economic survey also reveal that investment plans have fallen in both the manufacturing and service sector.
But the one bright spot in the survey – which covers the third quarter of 2010 – was that the service sector has reported improved sales both at home and abroad.
Even this may not be sustained, as the WMCC is warning that this may tail off if the global economy slows in the immediate future.
Simon Topman, chairman of the WMCC, said: “There are worrying indications that the global economy may slow over the coming months – at the same time, it is vital that economic conditions remain stable.
“We believe that businesses must be given the freedom to create jobs and wealth, and the Government must play its part by supporting capital investment.
“To this end, the business sector is anxiously waiting for the announcement about the Comprehensive Spending Review.”
Another element of the WMCC survey covered bank lending, and on the face of it, businesses reported that credit conditions had eased over the last three months.
However, this was tempered by the fact that lending figures remain relatively low, with access to finance continuing to hinder the business community.
Additionally, only 24 per cent of manufacturing businesses said that their cashflow situation had improved during the quarter.
Mr Topman said: “Whilst some of these figures suggest that there are signs of stability emerging from the West Midlands economy, there is certainly no sign of a dramatic improvement.
“For instance, the number of manufacturers reporting increased domestic sales in the last quarter only rose by three per cent, whilst at the same time there were four per cent fewer companies claiming increased overseas orders.
“This is also reflected in the fact that fewer manufacturers are planning to increase their workforce in the next three months – at the end of the day, we’ve still got a long way to go to beat the economic gloom.”