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Region Records Strongest Growth in Britain

Corin CraneAccording to PMI-based analysis the West Midlands has once again registered stronger performance than that achieved nationally, with the latest figures recording strong growth throughout the region, despite this having eased in February to 57% from 60.1% the previous month.

Although the immediate response to Brexit saw the PMIs record precipitous falls, the subsequent recovery has been strong and defied most pre-referendum forecasts. However, negative currency market sentiment has seen the pound sustain significant erosion since June, and this appears to have contributed to rising input prices. Coupled with firmer global commodity prices through 2016, the depreciation of the pound now appears to be feeding through into significantly higher consumer prices. The latest PMI again recorded tightening inflationary conditions in West Midlands input prices, increasing from 69.5 in January to 70.9. Moreover, price pressures for both input and output prices seem to be rising at a consistently faster pace than that recorded nationally. 

In addition to the growth reported in the latest PMI figures, the past week has also seen the launch of the Midlands Engine strategy, and the associated Midlands Connect programme, as the first concerted steps to comprehensively apply the Government’s Industrial Strategy to the region. Essentially, a key focus of the Midlands Engine strategy is the need to boost regional productivity. Whilst the perceived regional deficiencies are a result of a range of issues, including skills, capital investment and available labour, transport and connectivity infrastructure are additional factors that need to be considered. With this in mind, tacking infrastructure constraints would have a positive impact on regional productivity, providing a globally competitive infrastructure could facilitate further export growth.

Corin Crane, Chief Executive of the Black Country Chamber of Commerce, commented: “As the Midlands Engine strategy identifies and the Midlands Connect programme seeks to address, improving transport and connectivity infrastructure is vital to boosting the longer-term prospects of both the Black Country and wider region. It is important to recognise the need to develop soft infrastructure, with the increasing shortages of HGV logistics capacity being potentially exacerbated by Brexit if continental HGV access is restricted, which would urgently need tackling. Therefore, logistics capacity will be a key component of successfully enhancing productivity.”

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