Ongoing challenges of low economic growth
The West Midlands economy has remained relatively strong despite weak UK-wide growth. In 2024, UK GDP grew slowly - 0.5% in Q2, and just 0.1% in Q3 and Q4, ending the year with 1.1% overall growth. Growth is expected to stay modest in 2025 and 2026, with forecasts ranging from 0.9% to 1.5%.
Inflation has been falling - from a high of 11.1% in October 2022 to 2.6% in March 2025. However, global conflicts (especially in Ukraine-Russia and Israel-Palestine) continue to keep energy and supply chain costs high, affecting trade and business confidence. Uncertainty over possible U.S. trade tariffs has also made businesses more cautious.
Despite these challenges, business activity in the West Midlands grew slightly in late 2024, according to the Purchasing Managers’ Index (PMI), which stayed just above 50 for much of the year. Growth slowed by the end of the year, with the PMI dropping to 47.2 in January 2025, but a slight recovery to 49.6 in March suggests improvement.
Main concerns for local businesses include falling demand and high operating costs (energy, labour, borrowing, and taxes). Recruitment and skills shortages remain a major issue, even as more businesses and jobseekers use support services like the Coventry Job Shop.
Trade remains difficult due to post-Brexit import checks, especially with the EU. Still, the West Midlands outperformed the UK in exports for the year to September 2024, with exports to the EU up 3.5% and to the rest of the world up 5.9%. Potential trade deals with the U.S., India, and the CPTPP group may boost future export opportunities.
Local economic performance
The most recent local Gross Domestic Product (GDP) data is from 2023. That year, Coventry businesses generated £12.9 billion in value. GDP per resident rose to £35,719—still below the England average of £40,382.
Since the pandemic, Coventry’s economic output has grown in line with national trends. However, once inflation is factored in, real growth in 2023 was flat - mirroring the national picture.
Business surveys (PMI and Coventry & Warwickshire Chamber of Commerce) show a small but steady increase in business activity. Wages have also been rising. In 2024, the average full-time annual salary in Coventry was £34,994, close to the West Midlands average (£35,000), but still behind the England average of £37,617.
| Year | England | Coventry | WM region |
|---|---|---|---|
| 1998 | £17,390 | £17,656 | £14,967 |
| 1999 | £18,116 | £18,138 | £15,492 |
| 2000 | £18,933 | £18,760 | £15,979 |
| 2001 | £19,632 | £19,609 | £16,511 |
| 2002 | £20,367 | £20,025 | £17,044 |
| 2003 | £21,403 | £20,979 | £17,825 |
| 2004 | £22,335 | £22,131 | £18,642 |
| 2005 | £23,389 | £23,365 | £19,337 |
| 2006 | £24,405 | £23,573 | £19,913 |
| 2007 | £25,469 | £24,745 | £20,419 |
| 2008 | £26,006 | £25,327 | £20,864 |
| 2009 | £25,186 | £24,967 | £19,976 |
| 2010 | £25,933 | £26,006 | £20,707 |
| 2011 | £26,528 | £26,249 | £21,365 |
| 2012 | £27,202 | £26,713 | £21,934 |
| 2013 | £28,099 | £27,112 | £22,783 |
| 2014 | £29,259 | £28,903 | £23,671 |
| 2015 | £30,045 | £30,018 | £24,333 |
| 2016 | £31,003 | £32,394 | £25,215 |
| 2017 | £32,166 | £31,619 | £26,260 |
| 2018 | £33,018 | £31,903 | £26,942 |
| 2019 | £34,103 | £32,560 | £27,409 |
| 2020 | £32,153 | £29,962 | £25,668 |
| 2021 | £34,714 | £32,390 | £27,873 |
| 2022 | £37,774 | £33,728 | £29,921 |
| 2023 | £40,382 | £35,719 | £32,077 |
There is a continued need to build on Coventry’s strengths to create more high-quality jobs. This can help reduce inequalities, especially if local residents are supported with the right skills for future jobs.
It’s also important to strengthen the local business support system to boost the number of high-growth companies. Currently, only 3.5% of businesses in Coventry are classed as high growth, compared to 4.9% nationally.
