The latest quarterly economic survey from the Greater Birmingham Chambers of Commerce and recruitment agency Katie Bard shows a decline in sales in the first three months of the year.

However, GBCC president Greg Lowson said businesses remain confident that their fortunes will soon improve.

While a relatively healthy 56% of manufacturers expect their turnover to improve in the next 12 months, the corresponding figure last year was 80%.

Meanwhile, investment plans remain steady, with 33% preparing to acquire new plant and machinery (against 40% previously) and 25% planning to spend more on training (against 34% previously).

Mr Lowson said: “This survey demonstrates remarkable determination across our region. While there is no denying that there have been difficulties, there is a strong belief that fortunes will improve.”

However, export figures for the manufacturing sector are at their lowest point for over a year, with just 25% of businesses reporting increased sales (down from 32% a year ago).

Meanwhile, the UK market is faring little better; year on year, there has been a fall from 51% to 33% in the number of firms reporting increased sales.

Mr Lowson said: “With businesses still planning to invest in their infrastructure, staff and new recruits, we can take heart that the downturn in sales and orders will be reversed. However, these figures reflect difficult trading conditions.”

John Mortimer, chief executive of Katie Bard, said that trends in the recruitment sector over the last quarter indicate several reasons to be cheerful. “In recruitment terms, there has been some fairly strong confidence lately — particularly with decision making, if not volumes. This is very indicative of a mood of greater confidence.”