Unemployment may have dipped slightly but an export-led recovery remains the West Midland’s best hope of escaping the economic austerity that has descended over the UK.

The latest quarterly survey by the West Midlands Chambers of Commerce (WMCC) found that export sales by the region’s manufacturers were growing, despite the lack of support for businesses who wish to trade abroad.

According to the survey, 41 per cent of respondents saw exports increase during the last three months, an increase of five per cent on the previous quarter.

A further 40 per cent said that that advanced orders had picked up, an increase of seven per cent on the last quarter.

Set against this is the continuing sluggish performance of the domestic market, where sales by the manufacturing sector have remained much the same for the past year.

The picture for the service sector is not as good, with both domestic and export sales declining slightly in the past quarter.

Mike Ashton, WMCC board member and chief executive of Hereford and Worcester Chamber of Commerce, said: “The economic recovery is going to be export-led by the region’s manufacturers, and one of the main factors in this is a pick-up in world trade.

“We are hoping to see continuing improvements in our international trading position.

“It is vital that the growth we have seen in exports in maintained and accelerated, and more UK companies look to sell goods overseas.”

He added that WMCC was continuing to call for more support to help small to medium sized (SME) businesses join the export bandwagon.

The quarterly economic survey also revealed that on the employment front, the number of jobs in the region had increased, with the number of businesses reducing the size of their workforce decreasing.

In fact, the percentage of manufacturers attempting to recruit now stands at 45 per cent, four per cent up on the previous quarter.

One of the biggest obstacles to growth in the region remains cashflow, with 28 per cent of manufacturers and 21 per cent of service sector businesses experiencing a worsening situation in the past three months.

The number of people out of work in the West Midlands has reduced slightly – but the region remains one of the country’s worst-performing.

The latest unemployment statistics show a fall of 4,000 in the West Midlands last month, meaning there are not 260,000 people out of work – a rate of 9.7 per cent.

That is worse than any other UK region except the North-east, where the unemployment rate stands at 10.4 per cent.