After starting the year in high spirits with rising levels of sales, profits and optimism, the picture has turned increasingly gloomy over recent months.
The latest economic survey from the Black Country Chamber of Commerce says factory bosses are reported their sales in the UK have fallen back to last year's levels after six months of 'significant decline'.
And exports are in even worse shape, declining further since reaching a peak earlier this year. They are currently at their lowest level for five years.
The Chamber says there is a lack of business investment, with any growth in the economy coming from a 'consumer-led bubble'.
Chamber president, Ninder Johal, said: "At the start of 2014 we were reporting high levels of optimism, growth and sales. It is disappointing to see exports decline so quickly.
"I understand that the European and Russian markets have collapsed for different reasons and that there is a slow-down in China. Nevertheless, Brand Britain still counts across the world and our Export Expert programme will help firms identify new opportunities.
"These results suggest that any economic recovery being reported is not being driven by business investment. We have seen the dangers of consumer-led bubbles in the past and yet newspaper reports suggest that underneath the rhetoric of deficit reduction and high growth lies a very dangerous set of assumptions behind how far consumers are prepared to go to supplement their falling standards of living."
Mr Johal also called for more spending on roads, rather than on the £50 billion HS2 high-speed rail project, to support business in the region. "Experts tell us that for every £1 spent on developing new roads, £4 is added to the economy. Our members are telling me that they are unlikely to use HS2 and so why aren't we investing in improving the road infrastructure?
"Congestion is costing this area jobs and investment. Our members want to be able to transport their products across the country to the door of their customers."
The Chamber survey also found an unexpected decline in export sales for service sector companies in the Black Country – ranging from banks and hotels to telecoms and transport – and their expectations for higher profits over the next year have fallen by 17 per cent.
But among manufacturing companies profit hopes have fallen by half since their peak a year ago. The number of factories taking on more staff has fallen by nine per cent since the previous quarter, with a 12 per cent drop in those planning on hiring more workers in the next three months.
Business confidence, measured by turnover expectations over the next 12 months, has declined by 18 per cent for manufacturers and 13 per cent for service sector organisations. Nevertheless over half of manufacturing and two-thirds of service sector responses expect turnover to increase over the next 12 months.