Manufacturers in Birmingham and Solihull are turning to export sales to help them through the economic downturn, according to new figures released.

The last quarterly economic survey of 2009 by Birmingham Chamber of Commerce and Industry (BCI) revealed that the decline in manufacturers' home sales almost doubled in the past three months but exports leaped from 39 to 45 per cent.

The figures marked a gradual improvement on a year ago, when companies were reporting that sales and forward orders had slumped by over a half.  

There was better news in the service sector, with a percentage balance of +14 per cent reporting an increase in sales and +7 per cent reporting an upward trend in forward orders. 

Paul Bassi, the BCI's president, said: "The fall in sales at home is worrying and underlines the tough market condition manufacturers are experiencing. Although in some cases figures are looking vastly better than a year ago, we are still operating at extremely low levels of profitability and turnover. 

"But manufacturing is continuing to benefit from the weak pound and we hope their improved performance abroad will be sustained into the New Year.

"The Chamber has prioritised its well respected international activities and important trade missions abroad have been lined up for 2010 to brief companies on how to change their markets and products.

"A major opportunity comes in January when the Chamber leads a sell-out trade mission to Auto Expo in New Delhi. Many West Midlands car component manufacturers and universities have registered, all showing a close interest in sales around low carbon technology."

Thirty-seven per cent of manufacturers said their sales had dropped in the final quarter, compared with only 20 per cent in the previous quarter.

Unemployment in Birmingham has now reached 51,497 and although 22 per cent of manufacturers said their workforce had decreased during the final quarter, they were optimistic of being able to recruit over the next three months. Twenty per cent expected to be in the jobs market next year.

Over half (52 per cent) said their profitability had slumped in the past 12 months and this had a negative impact on firms' investment intentions.  

However, there was a great deal of confidence that turnover (62 per cent) and profitability (55 per cent) would improve next year.

The service sector, providing mainly professional and business services, marketing, media, transport and distribution support and tourism, hotels and catering, showed a gradual improvement year-on-year.

Thirty-six per cent said their home sales had improved while 35 per cent reported better advance sales. This upturn was more marked in exports with 43 per cent increasing sales and 39 per cent boosting orders.

Cash flow picked up a little in the past three months but profits for the previous 12 months had slumped to a per centage balance of -10, the lowest level for over 17 years.   

Investment plans for training peaked during the economic downturn in Quarter 2 2009 at +25 per cent but since then have rapidly dropped during the economic downturn to +2 per cent in Quarter 3 and -2 per cent this quarter.  

Mr Bassi added: "The Chamber has been consistent in its criticism of the government's proposal to increase National Insurance contributions and we still believe this will only serve to make firms think twice before taking on more staff.

"On the whole, investment plans seem to be muted. The uncertainty over demand levels, difficulties accessing finance, the large margin of spare capacity coupled with firms' reluctance to commit spending at time when the short and medium long-term future demands are unknown, are all affecting the domestic economy's performance."