At the same time, business confidence is rising and companies' investment intentions have improved, while exchange rates seem to be less of a concern for businesses in the area despite the pound rising to its highest level since the Brexit referendum.
The findings come in the latest Quarterly Economic Survey (QES), carried out by the Black Country Chamber of Commerce and in partnership with the Black Country Local Enterprise Partnership (LEP).
It comes as EU negotiations move on from the rights of EU citizens and the financial settlement, to what a future trading relationship will look like. The guarantee of a two-year transition period has also been welcomed by exporting businesses who were concerned about a potential ‘cliff-edge’, as they can develop contingency plans through the period of implementation to protect their intricate European supply chains.
In terms of statistics, 89 per cent of Black Country manufacturers reported either improved or constant export sales in Q1, up from 84 per cent on the previous quarter and up from 49 per cent in Q1 2017. The service sector also saw improved or constant export sales at 94 per cent, up 1 per cent from Q4 2017 and up from 85 per cent on the year.
In terms of profitability, 87 per cent of manufacturers reported increased or constant expectations in Q1 2018; an 8 per cent increase on the 79 per cent recorded in Q4 2017 and significantly higher than the 52 per cent reported in Q1 2017. The service sector expressed the same profitability statistics in Q1 2018 as Q4 2017 at 89 per cent, whilst being up on the 80 per cent recorded 12 months ago.
Moreover, 97 per cent of Black Country manufacturers either increased or maintained training investment levels in Q1 2018, up from 89 per cent in Q4 2017 and up from 76 per cent recorded in Q1 2017. 93 per cent of service sector businesses either increased of maintained spending on training investment, slightly down on the 95 per cent from Q4 2017 but up on the 81 per cent recorded in Q1 2017.
Corin Crane, chief executive of the Black Country Chamber of Commerce, commented: “Although Brexit uncertainty dominates news headlines, it is just one of a series of concerns facing Black Country businesses. The rise in the National Living Wage and National Minimum Wage, continued difficulties around understanding and spending their apprenticeship levy, and planned business rates rises are all domestic pressures that concern our members.
“There is good news, however, in terms of increasing export sales and profitability for the local business community. Although the political debate around membership of the Customs Union continues to rage, it is good to see that on the ground, businesses are largely reporting more optimistic outlooks in terms of export sales.”
Stewart Towe, Chair of the Black Country LEP, added: “The Black Country has a proud heritage of selling products and services all around the world and official Regional Trade in Goods statistics from HMRC show that the West Midlands accounts for the greatest share of UK exports of all regions outside London & the South East, making up 10 per cent of the total at a value of almost £35billion.
“Strong recent export growth, and an understanding of the scale of exporting locally, reflects the positivity reported in the Quarterly Economic Survey for Q1 in 2018. Combined, the evidence presented provides confidence to the region’s trading future in a post-Brexit world. As we learn more about the UK’s position outside of the EU, Black Country LEP will continue to work with partners, such as the Black Country Chamber, to ensure a seamless as possible transition for the region’s business base, with a continually growing base of exporters at the heart of this.”
For more information on the results of the Q1 2018 QES, visit www.blackcountrychamber.co.uk/qes or call 0330 024 0820.