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The Black Country Chamber has a large proportion of its membership engaged in manufacturing, a key strategic sector within the West Midlands region.

The manufacturing sector in the Black Country is of particular importance as it contributes 13% to regional GVA and employs 15% of the workforce, both above the national averages. The particular importance of shipping to the success of this industrial sector is demonstrated in the £23.8bn worth of goods the West Midlands exported in Q1 of 2021, of which just over £2.5bn were manufactured goods.


Although there are a number of challenges facing the manufacturing industry over the past year, in the past two months, we have gained traction in lobbying efforts behind two of these issues: the impact of national steel quotas and increased international freight costs.


Freight Costs

The increases in shipping costs are an issue raised repeatedly by Black Country businesses over the past 18 months, as dry bulk shipping costs have reached a decade high (Financial Times, May 2021), this has affected both import costs of raw materials and goods export costs.

The export regions of most concern have been North America and Asia, with Black Country Chamber Member’s data suggesting roughly a doubling of shipping costs to North America and quadrupling to Asia in the past 12 months.


Working in collaboration with the British Chambers of Commerce Trade Policy team, it was clear this was a national issue and there was concern that the increases in freight costs were being artificially being inflated.


In response The Black Country Chamber gathered examples and case studies as evidence and lent our support to a letter from the British Chambers to the Competition and Markets Authority to raise these concerns and request an investigation.


Steel Quotas

The British Chamber of Commerce’s Quarterly Economic Survey for Q1 2021 – the UK’s largest independent business survey – has seen a sharp rise in the percentage of firms expecting their prices to increase in the next three months. Overall, 38% of firms expect prices to rise in the next quarter, while only 5% expect prices to decrease.


Production and manufacturing firms, and retailers and wholesalers were more likely to expect price rises (52% and 56% respectively), with the vast majority of these firms citing raw material costs as the driver. These are the highest levels in the history of the QES dataset going back to 1989. 


In the ‘British Chamber of Commerce’s April Covid-19 Reopening Survey’, it was asked of businesses what percentage change they expected in their overall prices of products/services over the next 12 months. On average, respondents expected a 7% increase in their prices over the next twelve months. On average, manufacturers expected a 10% increase. 

While CPI inflation is rising, the headline figures do not tell the full story, the real harm can be seen in the growing pressure on firms’ cost base from rising prices.

A major issue in the space for Black Country businesses as big users of steel have been quotas and subsequent tariffs - which are having a severely negative effect on UK manufacturers’ ability to access globally competitive steel sources and supply chains.


In the context of already high steel prices in an uncertain global market, the government’s decision to overrule the findings of the Trade Remedies Authority (TRA) in June is providing crippling uncertainty and increased cost bases for businesses. This has been exacerbated by the Liberty Steel crisis, with a lack of UK-produced steel meaning that companies have no choice but to import from abroad, including EU countries.

In an effort to raise the profile of this issue, the Black Country Chamber working in collaboration with the Black Country LEP and industry bodies have lobbied policymakers regionally and nationally to support our efforts to raise these issues at the highest level within The Department for International Trade, who overruled the Trade Remedies Authority’s recommendation.


Hospitality Industry Roundtable

Tourism and hospitality have been one of the West Midland’s success stories, featuring as a priority sector in the Local Industrial Strategy and is viewed as one of five enabling sectors by the Black Country LEP helping to power the region’s economy.


Prior to the pandemic, domestic tourism in the West Midlands was driving growth and supporting jobs. The number of domestic overnight trips was up by 15% in 2019 compared to 2018, an increase higher than any other English region. In 2019, there were also 8.9 million domestic overnight holiday trips to the region, with these holidaymakers spending over £1.4 billion in the same period. 


It supported 137,458 FTE jobs and generated over £13.1 billion a year for the regional economy. English destinations are also a huge draw for overseas visits – in 2019, there was a record 2.4 million international visits to the West Midlands with a spend of over £1bn.

The Chamber has been maintaining pressure to highlight these challenges and recently shared the issues this sector faces with the Rt Hon Sir Starmer, Leader of HM Opposition at a breakfast meeting.

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