Manufacturers reveal sharp rise in exports

A sharp upturn in exports has been reported by Greater Birmingham’s manufacturers. 

Almost half (48 per cent) of the manufacturers surveyed in the Quarter 4 business report produced by Greater Birmingham Chambers of Commerce (GBCC) reported rising sales, compared to just 24 per cent in Quarter 3. And 36 per cent said that their order book had increased in the past quarter, compared to 29 per cent in the previous quarter.

The rise in sales and orders is believed to be linked to the UK’s looming exit from the European Union, with non-UK manufacturers desperately trying to beat the departure deadline.

Raj Kandola (pictured), senior policy and patron adviser of the GBCC, said that manufacturers – including the car industry – were trying to beat Brexit in case of any ‘no deal’ chaos at Britain’s ports and airports.

Additionally, some manufacturers in the car industry have announced intentions to bring forward their annual shutdown to coincide with Brexit.

Mr Kandola said: “Much has been said about what might happen if there is no-deal – of course, no-one knows with any certainty what the outcome will be, but business hates any kind of uncertainty and is clearly putting Plan B into action now, just in case.

“It would be churlish to downplay the impact that a disorderly Brexit could have on the regional economy and the country as a whole. Whilst we cannot predict what the future will bring, the GBCC will be on hand to support local businesses to ensure they put practical steps in place to ready themselves for what is likely to be an extremely unpredictable and ever changing landscape.”

Mr Kandola added that for the manufacturing and service combined, the overall rise in export sales was the highest recorded since the beginning of 2017.

 He said: “In total, 37 per cent of firms in the two sectors combined revealed an uplift in overseas sales, a 14 per cent increase compared to the previous quarter’s figure of 23 per cent.

“We also saw a 2 per cent decrease in the number of firms reporting a drop in their international output compared to Q3 (down from 10 per cent to 8 per cent). Both individual sectors followed a similar trajectory.”

The other key feature of the Quarter 4 statistics is an increase in the service sector’s workforce, which contrasts with a decline in the fortunes of the region’s manufacturers.

The Q4 survey found that 38 per cent of service sector employers reported a growth in their workforce, compared to 29 per cent in Q3. Among manufacturers, only 18 per cent reported an increase to their labour force, down from 42 per cent in the previous quarter.

Paul Faulkner, chief executive of the GBCC, said: “The results from the Q4 Quarterly Business Report are a testament to the continuing durability of businesses in Greater Birmingham.

“Domestic demand remains high, export levels saw a welcome recovery and it was pleasing to see an increase in the number of firms investing in their businesses.

“Whilst we saw a slight fall in recruitment levels, price pressures slightly eased and once again, profitability and turnover projections remain strong as our firms continue to thrive in such testing circumstances.

“Given the national context, it was perhaps no surprise to see concerns around the rate of inflation intensify despite the recent fall in global crude oil prices.

“Looking ahead to 2019, it is clear we are entering into a crucial period of our country’s history. The outcome of Brexit negotiations are likely to shape the economic and political frameworks of the United Kingdom for years to come.”

Professor Julian Beer, deputy vice-chancellor at report sponsor Birmingham City University, said: “With Brexit currently omnipresent on the political landscape, the GBCC latest Quarterly Business Review shows welcome signs of stability in the business environment.

“Both domestic and export demand are at levels similar to those seen over the past two years and forward-looking orders are also performing well.

“While there are undoubtedly some looking at the coming months and political uncertainty with trepidation, it is positive to see that advance-orders for the export market are stable or growing for a majority of businesses surveyed. Growing new markets overseas and diversification will continue to be key for business, whatever the outcome of Brexit.”

* Full details of the report are available at www.birmingham-chamber.com  The GBCC Q4 Business Report launch event will take place on 15 January, at Birmingham City University, The Curzon Building, 4 Cardigan Street, Birmingham, B4 7BD. The event will start at 7.30 am and finish at 9.30 am. To register your attendance Click Here