Warwickshire is best in UK for economic growth

July 23, 2018

Warwickshire is leading the country in business growth – in the face of national uncertainty for future trading conditions.

Coventry and Warwickshire have suffered a drop in business confidence over the Spring, as managers think twice about investment amidst Brexit and trade tariff uncertainty.

But the region can maintain its trade growth in the UK by tackling barriers to business, Coventry and Warwickshire’s Chamber of Commerce has said.

The Chamber and Warwickshire County Council held an Economic Outlook event at the Billesley Manor Hotel in Alcester last week, to look at economic analysis from the last business quarter.

Its Quarterly Economic Survey showed that business confidence dropped slightly compared to January – March. But the region’s optimism is well ahead of the national picture.

‘Economy treading water’

The event heard from Suren Thiru, Head of Economics and Business Finance at the British Chambers of Commerce, and Dave Ayton-Hill, Economy and Skills Group Manager at Warwickshire County Council.

Mr Thiru said the UK economy had been treading water since 2016 and that the 0.2 per cent growth rate in the first quarter of this year was the weakest since 2012.

He said the British Chamber’s forecasts – based on ‘an orderly Brexit’ – were for weak growth in the next few years and that they should act as a ‘wake-up call’ to Government.

But Ayton-Hill said the economy in Coventry and Warwickshire was the fastest growing in the country and was bucking the national trend.

He said: “The figures in this area are very positive and are above the national average.

“Despite there being very real national concerns, the confidence in Coventry and Warwickshire is very high and we know that confidence means companies are more likely to invest.

“Brexit concerns are starting to increase particularly among those companies who export but the mood remains positive.

“Why? Automotive manufacturing, including Jaguar Land Rover and its supply chain – as well as other inward investment – is a strong factor but we’ve also seen growth in logistics and tourism.

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“But even if you took out automotive, the region would still be performing well as an economy.

“So despite a great deal of uncertainty on a national and global scale, there are huge opportunities to build on here in Coventry and Warwickshire.”

Our region bucking the trend

Ajay Desai, Trade Director at the Coventry and Warwickshire Chamber of Commerce, said: “It is great to see Coventry and Warwickshire bucking the trend and I see on a day-to-day basis that companies continue to seek new opportunities to trade overseas.

“The message to the Government has to be that while Brexit dominates the agenda there is plenty that can be done on the domestic front to support business growth.”

Industrial heritage

Warwickshire has many strengths for business – a strong industrial heritage, transport links in the heart of England, and well educated workers leading hi-tech innovation.

Tom Mongan, General Manager of Nuneaton-based manufacturing company Subcon Laser – which employs 35 staff, said: “There are many reasons why I believe this region continues to buck the trend. We have an incredible location, with superb road, rail and air connectivity which is extremely attractive.

Shot from Subcon Laser (Image: Subcon Laser, Nuneaton)

“And, while there is a wider issue around skills, we are blessed with a good level of skilled workers in this region due to the fantastic manufacturing heritage in Coventry and Warwickshire.

“From the major closures of bigger businesses in previous years, smaller companies have emerged in this sector and that has helped the region to keep those skills and, importantly, pass them on to the next generation.

“We are blessed with two fantastic universities – both of which understand and engage with business – alongside other institutions such as WMG and the MTC, as well as some outstanding businesses that are operating on the global stage such as Jaguar Land Rover, LEVC and MIRA .

“Our Chamber of Commerce is extremely proactive in the support it gives to businesses of all sizes and sectors which, again, helps companies to grow and thrive.

“And, finally, it’s a great place to live too, which is vital when attracting the best talent – with a host of world-class attractions on our doorstep, breath-taking countryside and the City of Culture right in the middle.”

Source: Coventry Telegraph

UK economy fears mount amid services woes

May 6, 2018

FEARS over the weakness of the UK economy are mounting after the revelation that UK services sector growth remained subdued last month, accelerating only slightly following a dramatic slowdown in snow-hit March.

And employment growth in the services sector slowed further last month, to its weakest pace since March 2017, according to the latest survey from the Chartered Institute of Procurement & Supply.

Chris Williamson, chief business economist at CIPS survey compiler IHS Markit, noted CIPS’s surveys of April activity in the services, manufacturing and construction sectors together pointed to the third-weakest monthly UK economic expansion since the immediate fall-out from the Brexit vote in summer 2016.

He highlighted the fact that the latest all-sector output index, at 53.2, was “historically consistent with the economy growing at a quarterly rate of around 0.2 per cent at the start of the second quarter”.

The all-sector output index had plunged from 54.2 in February to 51.9 in March, amid disruption from the so-called “Beast from the East” weather system.

Mr Williamson said the fact that it had last month failed to recover the ground lost in March underscored “how the economy has slowed since late last year”.

He added: “While anecdotal evidence collected from surveyed companies indicated that the weak PMI (purchasing managers’ index) numbers in March were in part attributable to business being disrupted by heavy snowfall, no such adverse factors were reported in April.

“The surveys have instead indicated that sales, investment and hiring are being hit by uncertainty about the economic outlook as well as sluggish domestic demand, notably among consumers.”

CIPS’s business activity index for the UK services sector edged up from 51.7 in March to 52.8 last month on a seasonally adjusted basis, having tumbled from 54.5 in February.

The April reading signalled the second-slowest monthly pace of services sector growth since September 2016.

Howard Archer, chief economic adviser to the EY ITEM Club think-tank, said: “It is notable that the April services PMI reading of 52.8 was below the average level of 53.1 achieved in the first quarter of 2018, which had been down from 54.5 seen in the fourth quarter of 2017. It was also clearly below the 2017 average of 54.2.”

He added: “Subdued consumer spending was reported to have held back services activity in April, indicating consumers remain cautious as the extended squeeze on their spending power only gradually eases. Additionally, business spending was seemingly hampered by concerns over the domestic economy.”

Economists believe the chances of a rise in UK base rates when the Bank of England’s Monetary Policy Committee meets next week have reduced dramatically since mid-April, amid a raft of weak economic indicators and dovish comments from Bank Governor Mark Carney.

Figures published last week by the Office for National Statistics showed the UK economy grew by just 0.1% quarter-on-quarter in the opening three months of this year.

Source: Herald Scotland