MANUFACTURERS in Worcestershire and Herefordshire are fighting hard to win contracts in the UK and overseas, according to the region's biggest business survey.

The quarterly membership polls by the Confederation of West Midland Chambers of Commerce are regarded as key indicators of the health of the local economy.

And according to the confederation's third-quarter survey, its 13,000 member companies remain confident about trading prospects despite increasing pressures such as higher interest rates.

Around two-thirds of those companies predict that their profits are likely to rise in the final quarter of 2004, and more firms reported higher advance orders, both nationally and internationally.

The number of firms expecting to recruit in the fourth quarter is also up.

However, the confederation's newly-elected chairman, David Burton, said the research dramatically revealed the impact of recent interest rate rises on the service sector.

"The number of companies citing the cost of finance as their biggest pressure on upward price rises has virtually doubled in just three months," he said.

"However, the fact interest rates have stabled has come as welcome news."

The survey underlined the extent to which West Midland businesses in all sectors continue to suffer from skill shortages at all levels, something which the Learning and Skills Council Herefordshire and Worcestershire announced earlier this week it hopes to help put right with a £105m revamp of education and work-related learning.

Mr Burton is also convinced that it is an area in which many companies could gain vital support and advice from their Chambers of Commerce.

"Each chamber can provide a wealth of assistance to owner-managed businesses and even the biggest organisations," he added.

"They have courses for all manner of training options, from senior management to the shop-floor, can provide business diagnostic analysts and offer a wide range of networking events.

"Grants are also often available to subsidise the cost of these services.

"Quality, availability and price are all givens with firms in Herefordshire and Worcestershire.

"But what they, and the West Midlands as a whole, must do is look at what else they can give to customers to protect their commercial relationships."