Sentiment tracked by ICAEW’s Business Confidence Monitor (BCM) for Q3 2024 for the region put confidence at 13.1 on the index, up from 12.9 in the previous quarter and significantly above the historical average, but below the national reading of 14.4.
ICAEW said that confidence was likely pushed up by lower cost pressures, with input price inflation the joint lowest of all UK regions and nations, alongside Yorkshire and the Humber. Businesses anticipate further easing in the year ahead, with input cost growth expected to drop below the historical average.
Domestic sales growth fell for the second quarter in a row, declining below the region’s historical average to 2.5%, the second-lowest rate in the UK. However, in the year ahead companies expect a significant uplift, with domestic sales growth to reach 6%, with projections among the most optimistic in the UK.
Export sales in the West Midlands grew at just 1% in the year to Q3, the UK’s weakest rate and the fourth quarter it has slowed. ICAEW said that this was likely linked to the weak growth seen in manufacturing and engineering, which are highly concentrated in the West Midlands. Exports are set to grow by 3.8% in the year ahead, which would be above the region’s historical average.