Manufacturing key to West Midlands' top economy
The West Midlands economy is outperforming the rest of the UK due to the strength of its manufacturing output, according to a new report.
The Midlands Economic Forum regional monitor for August showed that firms in the West Midlands saw business activity increase at a quicker pace than any other region in the UK.
In the monthly report it is noted that business confidence is under pressure from 'Brexit-related uncertainty', although it is said to be 'stronger in the Midlands due to robust manufacturing output'.
The latest West Midlands Business Activity PMI rose to 58.6 in August from 56.7 in July, putting the region at the top of the pile. The UK figure was 54.
Professor Julian Beer, deputy vice-chancellor at Birmingham City University, said: “Once again, the Midlands is showing strong performance compared to, and in some cases in contrast to, the rest of the UK.
"This strong performance of the region is despite regional infrastructure being at or near capacity in many cases, and skills shortages in some key regional industries.
"The fact that the region remains at the apex of global value-added supply chains bodes well for its success outside of the European Union, despite some challenges posed by Brexit.”
The report says that business activity across the region rose for the thirteenth consecutive month, with the growth driven primarily by an increase in new orders in both the manufacturing and the services sector.
It comes after figures obtained by the Labour party revealed that wages in the West Midlands are growing at a faster rate than the majority of the rest of Britain, with pay packets growing in real terms by two per cent in 2015 and three per cent in 2016.
It puts the West Midlands as the joint best performing region in England, Wales and Scotland, with only Northern Ireland posting better figures.
Average weekly pay in the West Midlands is £535 a week, according to official figures, up from £517 a week in 2013.
Meanwhile the Lloyds Bank UK Regional PMI survey said that in August businesses in the West Midlands showed the fastest rate of job creation the region has seen for almost two-and-a-half years.
However, many highlighted salary pressures, along with increased raw material prices, as contributing to the higher input costs they were facing.
The Lloyds Bank PMI is based on responses from manufacturers and services businesses regarding the amount of goods and services produced during August compared with the previous month.