The West Midlands recorded the strongest regional output growth in the UK last month, according to the latest Lloyds Bank Regional PMIs.
In the region, growth accelerated further with output increasing at the fastest rate in two years, with the PMI recording 60.3 in April (the strongest nationally) from 56.1 in March.
Although inflationary pressures stabilised, price pressures remain tight and there is evidence of producers feeding increased costs through to consumers.
However, confidence about future business prospects firmed further, bolstered by both business activity and new orders growth rates, which exceeded current UK averages.
Price pressures continued to prove challenging, however overall private sector performance was boosted by continued rapid growth in output, new orders and employment take-up.
Corin Crane, chief executive of the Black Country Chamber of Commerce, said: “Growth in overall output, new orders and employment demand have contributed to another impressive performance for the region, fuelled in no small part by the dynamism of the Black Country manufacturing sector.
"Inflationary pressures remain acute and with formal employment levels tightening, the next government’s policies to tackle these will be crucial. Positive business sentiment has also been recorded in our surveys and responses from members, therefore boding well for the future."
In contrast to PMI data over the first four months of the year, official data provides a more constrained picture of economic activity.
Noticeably, despite more vigorous growth in the final quarter of 2016 (0.3%), in the first quarter of this year production increased by 0.1%, with a monthly fall recorded of -0.5% in March.
The discrepancy, in part, is that much of the production decline has been in the oil-related sector, and not in industries concentrated in the Midlands, notwithstanding problematic conditions in the basic metals sector.
Whilst imported inflation appears to be easing, as Sterling stabilises and some global commodity prices soften, price pressures in the first four months of the year appear to be firmer, in part perhaps due to tightening global metals prices, than Britain overall.
Expectations of future business have firmed since the EU Referendum result in June last year, and have firmed further since the activation of Article 50 in March. However, qualms may emerge during Brexit negotiations, which are now expected to progress between commencing in October 2017 to conclusion in October 2018.
Philip Wood, regional head Midlands at UBS Wealth Management, added: “A recent survey of clients taken at our UBS Forum earlier in the year, showed 76% of respondents in the Midlands feel confident about economic growth in the region. It is encouraging to see their sentiment backed up by the latest PMIs.
"The businesses we speak to have even remained resilient in the face of Brexit and Election uncertainty. Local confidence is being significantly boosted by ongoing investment in our region. The HS2 development and Paradise Circus redevelopment in the city centre have created much excitement among businesses both in and outside of Birmingham.
"HSBC, for example, has already moved headquarters to Birmingham as regional redevelopment pushes forward. We expect the Government’s commitment to invest outside of the South East to continue to drive confidence and growth in our region.”