Business confidence increases for Black Country firms in second quarter – new survey

11 Jul 2024

Published in: Black Country Chamber of Commerce News

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Confidence among Black Country firms grew in the second three months of the year, the new economic survey by the region’s Chamber of Commerce has shown.

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The latest figures reveal that in the lead-up to the General Election 71 per cent of Black Country businesses said turnover would improve over the next 12 months, up from 59 per cent in Quarter 1.

The new data, based on surveys completed by local Chamber of Commerce member businesses from May 13 until June 6, also showed 62 per cent believed profitability will improve over the next 12 months compared to 53 per cent three months earlier.

The Black Country Chamber results were more positive than the national British Chambers of Commerce poll, which showed 58 per of firms expected to see their turnover increase over the next 12 months, with 51% of companies expecting profits to increase in the next year.

The Black Country Chamber of Commerce Quarterly Economic Survey (QES) for Quarter 2, published today, gives an up-to-date picture of the performance of the Black Country business community in the build-up to the General Election, which saw Kier Starmer lead the Labour party to power.

The results, announced at the Black Country Chamber of Commerce's third Quarterly Economic Survey Data Reveal event at the Mercure Birmingham West Hotel in West Bromwich, showed inflation remained a high concern for businesses but at a lower level than in Quarter 1.

The number of businesses attempting to recruit was slightly down on the previous quarter but more respondents reported recruitment difficulties.

The other key findings include:

• 42 per cent of firms reported an increase in domestic sales, up from 27 per cent in the previous quarter, while 42 per cent reported no change and 9 per cent reported a decrease, down from 27 per cent in Quarter 1.
• 9 per cent of firms reported an increase in overseas sales, down from 12 per cent in Quarter 1, while 22 per cent reported no change and 9 per cent reported a decrease.
• 62 per cent of Black Country firms attempted to recruit over the past quarter, down from 64 per cent in Quarter 1.
• 60 per cent experienced recruitment difficulties, up from 54 per cent in Quarter 1.

The results showed rising labour costs and the rise of utility prices continued to be the pressure points for businesses this quarter.

All the survey results were shared with Chamber members during a briefing, 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: “It is noticeable that there was a more positive outlook among Chamber businesses as Quarter 2 came to an end. Our latest QES has shown a noticeable increase in domestic sales, a rise in investment plans and confidence levels return to those seen six months ago.

“This is really encouraging to see as we enter the second half of the year on a high note, with plenty to build upon. The survey for the next quarter will show whether there is greater confidence following the General Election result or whether businesses continue to feel the challenges around inflation and costs which we have seen over recent years.”

Black Country Chamber of Commerce CEO Sarah Moorhouse said: “The first QES since the General Election result provides the Chamber with important data that enables us to review the performance, concerns and views of businesses in a time when the nation was poised to vote.

“The survey results are always closely watched by both HM Treasury and the Bank of England’s Monetary Policy Committee so with the country now looking forward it will help to inform decisions that impact upon interest rates and business policy.

“Black Country businesses are resilient in the face of adversity and the latest survey shows that even though rising labour costs and utility prices offered significant concerns, firms were looking to the year ahead with greater optimism than the previous three months.”

The survey event, sponsored by Business Growth West Midlands, also included a presentation by Munminder Gill and Paul Harper from Auditel on the theme of carbon emissions and the Carbon Border Adjustment Mechanism (CBAM) to be implemented by the UK by 2027.

The Chamber also held a panel discussion focusing on how businesses are responding to the challenge of Net Zero and complying with CBAM regulations, featuring Dan Downes of Mercia Group Services, Stuart Smith of Lord Combustion Services and Ben Towe from Hadley Group.

The full Black Country Chamber of Commerce QES Quarter 2 2024 summary findings included:

Sales Trends (Domestic and Export)

• 42 per cent of firms reported an increase in domestic sales, while 42 per cent reported no change and 9 per cent reported a decrease.
• 9 per cent of firms reported an increase in overseas sales, down from 12 per cent reported in Q1 while 22 per cent reported no change and 9 per cent reported a decrease.
• 32 per cent of businesses saw an increase in domestic orders this quarter while 11 per cent of businesses reported an increase in overseas orders.

Recruitment

• 62 per cent of Black Country firms attempted to recruit over the past quarter, down from 64 per cent in Quarter 1.
• 60 per cent of firms across the Black Country experienced recruitment difficulties in Quarter 2 compared to 54 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 and the rise of utility prices are the pressure points this quarter.
• Competition and inflation are amongst the highest concern for firms across all sectors in the region at 29 per cent and 27 per cent, respectively. In the previous quarter competition was the highest concern for 38 per cent, while inflation was the highest concern for 44 per cent.
• Cashflow increased for 30 per cent of firms while investment plans increased for equipment and training for 31 per cent of Black Country businesses.
• Overall, firms expect prices to remain constant over the next three months.

Business Confidence

• 71 per cent of Black Country businesses believe turnover will improve over the next 12 months compared to 59 per cent in Quarter 1.
• 62 per cent of Black Country businesses believe profitability will improve over the next 12 months compared to 53 per cent in Quarter 1.