The manufacturing industry has played an important role in the development of the West Midlands and the region remains one of the UK's main manufacturing centres. However, in recent years employment in this sector has decreased and the region's economy has become increasingly diverse. According to the region's development agency, Advantage West Midlands, there are in excess of 2,075 companies from 38 different countries located in the region, together with approximately 180,000 local companies. Some of the largest and well known of these include British Steel, Lucas Industries, The National Grid, Peugeot, PowerGen, Rover Group, Royal Doulton and Wedgwood. The region is also attracting considerable inward investment with a number of world class companies, from a variety of sectors, having set up offices and manufacturing facilities in recent years. These include Bombadier Inc, Charles Schwab Europe, Dana Corporation, EDS, HFC Bank, Jaguar, Jungle, Oracle, OSI Pharmaceuticals and Pepsico. Some of the principle reasons given by these companies for choosing the West Midlands include its large and skilled workforce, central location and excellent transport infrastructure. The availability of appropriate premises and grants coupled with the competitive rental costs have also made the West Midlands an attractive option for companies considering relocation or expansion.

Economy:
During the last 10 to 15 years the West Midlands has experienced real economic growth and unemployment has been steadily falling. In 1996, the ILO unemployment rate and claimant count rate stood at 8.6 per cent and 7.7 per cent respectively, compared to 5.4 per cent and 3.8 per cent in 2001. The West Midlands has also become a major exporting region and, according to figures from HM Customs & Excise, accounted for some 8 per cent of the UK's total exports by value in 2000.

The 2000 Annual Business Inquiry shows that the service sector now employs 72.7 per cent of the total workforce in the West Midlands. However, manufacturing employment still remains relatively high at 21.6 per cent, which is the second highest level of any region in the UK just behind that of the East Midlands.

Once a primarily industrial area, focussing on a small number of large industries, the West Midlands has come a long way in adapting itself to the challenges of the modern global climate by diversifying its economy, and has seen a dramatic increase in the number of small to medium sized enterprises. Advantage West Midlands, has identified 9 key sectors currently operating within the region. These include Added Value Engineering, the Automotive industry, Electronics & Telecommunications, Food & Drink, Healthcare & Pharmaceuticals, Logistics & E-Fulfillment, Rubber & Plastics, Services & E-business and Software.

Local Infrastructure:
Most major cities in the UK are within easy reach of the West Midlands region. It has good international air traffic links and well developed road and rail systems, which are set to benefit from considerable investment.

According to figures for 2000, published by the Department for Transport, the West Midlands handles nearly 6 per cent of all aircraft traffic in Great Britain catering for nearly 7.5 million passengers and 14,600 tonnes of freight annually. The regions main airport, Birmingham International, is one of the UK's fastest growing regional airports and offers over 200 scheduled flights a day to more than 50 destinations, including daily flights to both New York and Chicago. In addition, the West Midlands in under two hours away by road or rail from Heathrow and Gatwick airports.

The region is ideally placed at the centre of the country's road and rail networks, with motorways linking the North and South of the country, as well as the main West Coast rail line between London and the North West of England and Scotland, passing through the Birmingham and Coventry areas. In addition, the West Midlands Channel Tunnel freight terminal connects directly to the European mainland.

Local Workforce:
Figures for 2000-2001 from the Office for National Statistics show the West Midlands to have a labour force of approximately 2.5 million people and an employment rate of 73.2 per cent. Stoke-on-Trent unitary authority and West Midlands Metropolitan County have the lowest levels of employment within the region at 71.3 per cent and 68.7 per cent respectively. Approximately 47.5 per cent of the working population are educated to at least A level standard, while just 13.4 per cent have no qualifications at all.

Business Costs:
The cost of office space in the West Midlands compares favourably with much of the UK. In a survey conducted by City University Business School and Actium Consult in 2001, the average combined office rental and rate cost in Birmingham stood at £325.56 per annum per metre squared, compared with £858.99 for the city of London, £439.92 for Edinburgh and £257.06 for Cardiff.

Wage costs in the region are also competitive. In the New Earnings Survey 2001 published by the Office for National Statistics, average earnings in the West Midlands are approximately 94 per cent of the national average. Within the region, average earnings tend to be highest in Warwickshire, to the south east, and lowest in Herefordshire, to the south west.