Business confidence grows for Black Country firms despite challenges – new survey

11 Jan 2024

Published in: Black Country Chamber of Commerce News

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The Black Country Chamber of Commerce releases data for Q4 2023.

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Almost three quarters of Black Country businesses believe their turnover will improve in the next 12 months despite the economic challenges they face, the latest economic survey by the Black Country Chamber of Commerce has shown.

The new data, based on surveys completed by a record number of local Chamber of Commerce member businesses, showed the improvement in the Black Country was above the national average.

The Black Country Chamber of Commerce Quarterly Economic Survey (QES) for Quarter 4, published today, gives an up-to-date picture of the performance of the Black Country business community.

The results showed 71 per cent of businesses believed turnover will improve in the next 12 months, up from 55 per cent three months earlier.

The national results from the British Chamber of Commerce’s Quarterly Economic Survey, released last week, showed 56 per cent of firms were expecting an increase in turnover over the next year, the highest level since Quarter 1 of 2022 when Covid restrictions were lifted.

The new Black Country survey found 58 per cent of respondents said they expected profitability to improve in 2024, compared with 45 per cent in the previous quarter, yet the survey showed recruitment, wage inflation and rising energy costs are the biggest pressure points for businesses.

The results were announced at the Black Country Chamber of Commerce's first ever Quarterly Economic Survey Data Reveal event, held at the University of Wolverhampton Science Park.

The key findings include:

- Business confidence had grown with 71 per cent of respondents believing turnover will improve in the next 12 months, compared to 55 per cent in Quarter 3.

- 58 per cent of respondents believe that profitability will improve, compared to 45 per cent in the previous quarter.

- A further 36 per cent of firms reported an increase in domestic sales, up from 26% in the last survey.

- Just over half (57 per cent) of Black Country firms attempted to recruit over the past quarter, down from 71 per cent in Quarter 3.

Giving an up-to-date picture of the performance of the Black Country business community findings from the most recent quarter continue to provide an insight into how firms are dealing with the ever-changing economic climate.

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

Gemma Edwards said: “This quarter we have had our biggest response yet with 91 members completing the survey, giving us a snapshot of the feeling across the Black Country.

“The different sectors raise the same concerns around labour costs, utilities, and struggles to find sufficiently trained staff.

“Business confidence remains high, and it was encouraging to hear that our members were investing in new operating systems and technology to improve efficiencies, increase the workforce and expand the services they offer.”

Black Country Chamber of Commerce CEO Sarah Moorhouse, who gave the closing remarks at the QES launch event, said: “The QES is an important source for us at the Chamber to review performance, concerns, and views of our businesses so it is encouraging to see our local members feel more positive than the national average.

“The difficulties firms are facing across recruitment, wage inflation and price increases for raw materials are still concerning. However, it is good to see some signs of positivity in business confidence of improving profitability and turnover in the next twelve months, and that businesses are looking to invest in training and equipment.”

The survey event also included a discussion with Daniel Degg, Head of Employer Engagement and Business Development at City of Wolverhampton College, and a presentation by Lesley Holland, Managing Director at Juniper Training.

The full Black Country Chamber of Commerce QES Quarter 4 2023 summary findings included:

Sales Trends

Domestic and Export

- 36 per cent of firms reported an increase in domestic sales up from 26 per cent in Quarter 3, while 42 per cent reported no change and 14 per cent reported a decrease.

- 6 per cent of firms reported an increase in overseas sales while 14 per cent reported no change and 13 per cent reported a decrease.

- 31 per cent of businesses saw an increase in domestic orders this quarter while 5 per cent of businesses reported an increase in overseas orders.

Recruitment

- Just over half (57 per cent) of Black Country firms attempted to recruit over the past quarter, down from 71 per cent in Quarter 3.

- 62 per cent of firms across the Black Country experienced recruitment difficulties in Quarter 4 compared to 71 per cent in Quarter 3.

- 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 for businesses this quarter.

- Labour costs and utilities are amongst the highest concern for firms across all sectors in the region at 43 per cent and 47 per cent respectively.

- Cashflow has increased for 26 per cent of firms while investment plans have increased for equipment and training for 20 per cent and 24 per cent of Black Country businesses respectively. 

Business Confidence

- 71 per cent of Black Country businesses believe turnover will improve over the next 12 months compared to 55 per cent in Quarter 3.

- 58 per cent of Black Country businesses believe profitability will improve over the next 12 months compared to 45 per cent in Q3.

The Black Country Chamber of Commerce results were released after the latest British Chamber of Commerce’s Quarterly Economic Survey, the UK’s largest independent survey of business sentiment and a leading indicator of UK GDP growth, showed a small rise in business confidence.

Published last Thursday, the national results showed the percentage of firms expecting an increase in turnover over the next year (56 per cent) had risen to the highest level since Q1 2022 when Covid restrictions were lifted. The data also revealed that more firms expect price hikes, ending the downward trend of the last two years.

The survey, conducted in November, of over 5,000 firms across the UK - 91 per cent of whom are SMEs (fewer than 250 employees) - showed:

• Business confidence improved in Q4, with 56 per cent of UK businesses expecting an increase in turnover in the next twelve months.
• Despite this boost, most firms continue to report no improvement to sales, cash flow or investment.
• Downward trend in price growth expectations ends with more expecting their prices to rise over the next three months.
• Hospitality sector continues to struggle disproportionately, with nearly a third (32 per cent) of firms reporting a decrease in investment.

About the Black Country Quarterly Economic Survey Snapshot

The Black Country Quarterly Economic Survey Snapshot gives an up-to-date picture of the performance of the Black Country business community. 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 Q4 2023 Quarterly Economic Survey took place between 6 November – 27 November.

National QES results can be found on 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: Chris Leggett, Osborn Communications: chris.leggett@osborncommunications.co.uk