West Midlands service companies turn to overseas trade as downturn continues

First published in Business Daily

SERVICE sector companies in the West Midlands are increasingly turning to overseas trade to improve their fortunes as the economic downturn continues to bite.

A survey for the last quarter of 2012 carried out by the West Midlands Chambers of Commerce (WMCC) showed most companies, especially manufacturers, struggling to maintain their performance levels.

Service companies, however, including transport firms, retailers and wholesalers, marketing and media, law and accounting businesses, recorded 46 per cent of firms returning increased exports compared with 37 per cent in the last quarter of 2011.

Home sales showed a marginal improvement, with 38 per cent reporting increased sales compared with 37 per cent a year ago.

Job prospects, possibly increased by seasonal demand, showed 24 per cent increasing their labour force, down five per cent on Q4 in 2011.

Sales for manufacturers in the region continued to be a struggle. Thirty-one per cent, down 10 per cent year on year, reported an increase in UK market sales, while those experiencing fuller order books dropped to 30 per cent from 37 per cent.

Overseas sales showed a drop on last year, with 36 per cent (against 37 per cent) increasing sales and 32 per cent (against 34 per cent) boosting their exports.

There was also a fall to 29 per cent of businesses reporting an increased labour force and the number expecting to recruit in the next three months fell from 25 per cent to 19 per cent compared with last year.

Mike Ashton, spokesman for the WMCC, said: “These results are particularly disappointing because the drop in inflation from 4.8 per cent a year ago to the current 2.7 has not had a huge impact.

“We were expecting trading conditions to improve as inflation fell and conditions improved in the Eurozone but this had not proved the case.

“So, we again call on the Government to make trading conditions easier for business by cutting red tape and improving access to finance. This is imperative for reducing the region’s unemployment statistics.”

The West Midlands Chambers of Commerce (WMCC) brings together six Chambers - Birmingham Group, Black Country, Coventry and Warwickshire, Herefordshire and Worcestershire, North Staffordshire and Shropshire.

It speaks for 13,500 businesses, from large international groups to small emerging companies.

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