Business confidence in the West Midlands has fallen further as companies battling rising costs and a tough labour market fear a difficult year ahead, a survey of the region's chartered accountants has found.
ICAEW’s Business Confidence Monitor for the West Midlands for Q4 was published today - and ranked confidence in the region at -19.9, down from the previous quarter and below the national average of -16.9.
The ICAEW said that despite a strong sales performance, tough economic conditions and ongoing political turmoil helped drive confidence levels down. The body is now calling on the Government to help restore confidence in this week's Autumn Statement.
READ MORE: Contractions in new business and output soften in October - report
Export growth in the region increased at a sharper rate in the West Midlands than in the rest of the UK, while domestic sales were also buoyant. But that was overshadowed by the challenges faced by businesses - with 38% of those polled saying customer demand and regulatory requirements were prominent challenges for businesses, and with others saying access to capital was becoming still more difficult.
Labour market difficulties were also widespread. . The availability of non-management skills was an issue for 37% of firms, while a third were troubled by the availability of management skills and wage growth also hit a record high with only businesses in Scotland and Yorkshire and the Humber seeing sharper salary hikes.
Meanwhile input costs also rose to near-record rates, reflecting global energy prices and "ongoing supply-chain disruptions in the region’s manufacturing sector." That meant selling prices increased to record levels and the ICAEW says they are set to grow faster in the West Midlands than anywhere in the UK over the next 12 months.
The region recorded the second fastest profits growth in the country, behind only London, as businesses saw rising sales and responded to higher costs. That also meant growth in capital investment and research and development budgets increased at the sharpest rate across the UK, though the investment outlook for the coming year was more subdued.
Justin Kyriakou, ICAEW Midlands regional director, said: "Business confidence in the West Midlands is now firmly in negative territory, as companies struggle to contend with a combination of tough economic conditions and ongoing political disarray.
“While sales at home and abroad remain strong, for many firms this has been overshadowed by rising inflation and energy costs, recruitment difficulties and challenges associated with customer demand and regulatory requirements.
“On Thursday, the government must outline a plan to restore confidence, generate environmentally sustainable long-term economic growth, and bring opportunity and prosperity to our left-behind communities and regions.”
More from BusinessLive
