However, we further revised down the outlook for manufacturing to a small contraction of -0.3% (from a previous-0.1%) as the uncertainty in the Eurozone, the UK's main export market, has continued to bite.

Whilst this figure masks a number of more positive factors, in particular a divergence in the performance of different sectors with Automotive strong for example, when you consider that our sector sees half it's total exports go to the eurozone there is little doubt it was always going to be disproportionately hit by the continued crisis. However, the picture is not all bad news for the West Midlands economy as we should see stability improve in the second half of the year which will lead to a resumption of modest quarterly growth in GDP. In addition, manufacturing activity should step up a gear as we enter 2013 with companies continuing to benefit from exports which are forecast to increase by 4.1% next year, mainly to markets outside the EU.

This has been a pattern that has been especially evident over the last 18 months with non-EU recently exports exceeding these to the EU for the first time. However, as has been the case through this stop-start recovery significant risks and uncertainty remain and the bigger question is where we go from here. Our forecast scenarios show the importance of bringing greater confidence and certainty to the private sector.

The rebalancing process would be kick-started if firms were to push ahead with investment plans. But our forecast also shows the risks from another big shock such as a euro break up or significant deterioration in credit conditions for firms and households. Either event would knock the economy for six once again and further delay the onset of any green shoots of recovery. One thing is for sure and that is we cannot let up in all our efforts to promote growth, which goes for business and government. Only by doing so will we create the investment in capital and jobs that will grow and sustain the economy in the medium term.