West Midlands firms predicting turnover and profitability boost despite difficult environment
Businesses in Greater Birmingham are predicting a turnover and profitability boost in the coming months amidst an economic environment “marked by both caution and optimism”, according to a major economic report,
Greater Birmingham Chambers of Commerce’s latest Quarterly Business Report indicates a buoyancy among firms about the prospect of increasing their turnover and profitability.
The quarter three report, sponsored by Birmingham City University, revealed 65 per cent of businesses expect to increase their turnover over the next 12 months - up from 58 per cent in quarter two - while 25 per cent expect it to remain constant and just 10 per cent anticipate a decrease.
And 57 per cent expect profitability to improve over the coming year, a two per cent increase on the previous quarter.
GBCC chief executive Henrietta Brealey said the figures are “a testament to the underlying resilience of local businesses.”
Recruitment activity was relatively stable during quarter three – with 30 per cent firms increasing their headcount (up 1 per cent from quarter two) and 11 per cent experiencing a decrease (unchanged from quarter two).
However, there was a four per cent increase in businesses reporting recruitment difficulties (67 per cent).
It was a particularly challenging quarter for the manufacturing sector – of the 59 per cent of firms who attempted to recruit, 85 per cent reported difficulties.
Henrietta Brealey added: “From a local perspective, the latest Quarterly Business Report reveals that domestic sales activity fell slightly compared to the last quarter and export sales continue to suffer from geopolitical tension as the trade deficit widened from a national perspective over the summer.
“Recruitment activity remained stable in Q3 but ingrained challenges remain for those attempting to hire.
“Despite the national fall in the rate of inflation, price pressures remain prevalent for the majority of businesses across the region with investment in both training and capex falling across both indicators in the last three months.
“Nevertheless, business confidence across profitability and turnover projections remains strong and is a testament to the underlying resilience of local businesses.
“With the publication of the Autumn Budget, the Government will now need to work closely with the business community to ensure that their blueprint for growth remains anchored in pragmatism and takes into account the various challenges local firms continue to face.”
Professor Harris Beider, pro vice-chancellor, engagement, enterprise and innovation at Birmingham City University, said: “The quarter three report highlights a complex economic environment marked by both caution and optimism among businesses.
“While there is a decline in international demand and rising concerns about potential tax policies, as well as anticipated price increases, there is also a growing sense of optimism among firms in the West Midlands reflected in improved business confidence and expectations for increased turnover and profitability. Accelerated adoption of AI technologies will serve to catalyse economic growth across key sectors, such as manufacturing, healthcare, and finance.
“With a robust industrial base and a thriving start-up community, Greater Birmingham is poised to capture increased economic benefit and productivity as a result of AI-based innovation.”
