Business confidence drops for Black Country firms in first quarter – new survey

04 Apr 2024

Published in: Black Country Chamber of Commerce News

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Business confidence among Black Country firms fell in the first three months of the year, the latest economic survey by the region’s Chamber of Commerce has shown.

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New figures revealed 59 per cent of Black Country businesses believe turnover will improve over the next 12 months, down from 71 per cent in Quarter 4.

The new data, based on surveys completed by local Chamber of Commerce member businesses, also showed 53 per cent believe profitability will improve over the next 12 months compared to 58 per cent three months earlier.

The Black Country Chamber of Commerce Quarterly Economic Survey (QES) for Quarter 1, published today, gives an up-to-date picture of the performance of the Black Country business community.

The results, announced at the Black Country Chamber of Commerce's second Quarterly Economic Survey Data Reveal event at the Black Country and Marches Institute of Technology in Dudley, showed that rising labour costs and rising utility prices are the biggest pressure points for businesses.

The other key findings include:

- 27 per cent of firms reported an increase in domestic sales, while 41 per cent reported no change and 27 per cent reported a decrease.

- 12 per cent of firms reported an increase in overseas sales, up from 6 per cent reported in Quarter 4, while 18 per cent reported no change and 11 per cent reported a decrease.

- 64 per cent attempted to recruit over the past quarter, up from 57 per cent in Quarter 4.

- 54 per cent experienced recruitment difficulties in Quarter 1, down from 62 per cent in Quarter 4.

The results were unveiled during the briefing for Chamber members, which included a networking session followed by a data presentation from Gemma Edwards, Black Country Chamber of Commerce Policy and Impact Officer.

Gemma Edwards said: “While business confidence has fallen and there is a slight downward trend in domestic sales and orders from the last quarter of 2023, it was encouraging to see that more businesses looked to recruit in the first quarter of this year.

“Fewer Black Country firms reported difficulties hiring staff, although recruitment struggles continue, particularly for organisations looking to hire skilled engineers and technicians. Businesses are being cautious, with three quarters of survey respondents neither increasing or decreasing their investment in training or machinery and equipment.”

Black Country Chamber of Commerce CEO Sarah Moorhouse said: “The QES provides the Chamber with important data that enables us to review the performance, concerns and views of businesses. The survey results are closely watched by both HM Treasury and the Bank of England’s Monetary Policy Committee and help to inform decisions that impact upon interest rates and business policy.

“The latest survey shows that rising labour costs, utility prices and inflation continue to be significant concerns for businesses, but it is positive to see that, overall, firms expect prices to remain constant over the next three months.”

The survey event also included a presentation by Andy Hemming, Senior Partner at ActionCoach, on the theme of business succession planning.

The full Black Country Chamber of Commerce QES Quarter 1 2024 summary findings included:

Sales Trends (Domestic and Export)

- 27 per cent of firms reported an increase in domestic sales, while 41 per cent reported no change and 27 per cent reported a decrease.

- 12 per cent of firms reported an increase in overseas sales, up from 6 per cent in Quarter 4, while 18 per cent reported no change and 11 per cent reported a decrease.

- 19 per cent of businesses saw an increase in domestic orders this quarter while 12 per cent of businesses reported an increase in overseas orders.

Recruitment

- 64 per cent of Black Country firms attempted to recruit over the past quarter, up from 57 per cent in Quarter 4.

- 54 per cent of firms across the Black Country experienced recruitment difficulties in Quarter 1 compared to 62 per cent in Quarter 4.

- The majority of firms in the region found it difficult to recruit skilled/technical staff.

Business Resilience

- Rising labour costs are rivalling the rise of utility prices as a pressure point this quarter.

- Inflation and competition are amongst the highest concern for firms across all sectors in the region at 44 per cent and 38 per cent respectively.

- Cashflow increased for 23 per cent of firms while investment plans increased for equipment and training for 13 per cent and 18 per cent of Black Country businesses respectively.

- Overall, firms expect prices to remain constant over the next three months.

Business Confidence

- 59 per cent of Black Country businesses believe turnover will improve over the next 12 months compared to 71 per cent in Quarter 4.

- 53 per cent of Black Country businesses believe profitability will improve over the next 12 months compared to 58 per cent in Quarter 4.

About the Black Country Quarterly Economic Survey Snapshot

The figures in this report have been informed from quarterly economic surveys conducted by the Black Country Chamber of Commerce. The surveying period for the Q1 2024 Quarterly Economic Survey took place between 12 February and 4 March. National QES results for Quarter 1 will be published on 11 April and will be published on the British Chambers of Commerce website here.

As the most authoritative national business confidence survey, and the first to be published in each quarter, the results of this survey are closely watched by both HM Treasury and the Bank of England’s Monetary Policy Committee and help to inform decisions that impact upon interest rates and business policy.

The survey itself has reliably anticipated the onset of the two recessions since the early 1990s before they began and continues to act as a reliable indicator of national and regional economic performance. The Black Country Chamber of Commerce uses the results of the survey to inform upon detailed economic performance and trends throughout the local region and beyond.

Contact: Rachel Adams, Osborn Communications: rachel.adams@osborncommunications.co.uk