Firms fight back against economic challenges

The latest quarterly business report from Greater Birmingham Chambers of Commerce reveals growing levels of confidence amongst firms throughout the area in the face of a range of economic challenges.

A sales surge for the quarter from January to March saw 46 per cent of firms report an increase in domestic sales, up from the 40 per cent reported in the fourth quarter of 2022.

Also 53 per cent of manufacturers saw their UK sales increase over the last three months, while service sector sales rose for 44 per cent of firms, up from 42 per cent.

Meanwhile, firms are expecting a balance sheet boost with 42 per cent of firms in the two sectors combined anticipating that their advanced domestic orders will increase over the next three months.

Henrietta Brealey, chief executive of GBCC, said: “Our latest quarterly business report underlines the growing levels of confidence amongst businesses operating in Greater Birmingham. Both turnover and profitability projections have risen, domestic activity has picked up over the past three months and recruitment activity has also seen a welcome uplift as a greater number of businesses have added to their headcount in comparison to the end of last year.

“It’s also pleasing to see the growth in investment activity, particularly in relation to capital expenditure and training staff – a key driver in unlocking stagnant levels of productivity growth. All of which is reassuring given the broader economic challenges our businesses are facing on a daily basis as spiralling energy bills, soaring inflation and global supply chain disruption continue to hamper economic activity both home and abroad.”

Ms Brealey warned that economic growth was being hindered by ‘sluggish’ export activity with many firms squeezed by price pressures.

“Within this context, it is perhaps not surprising to see that export activity amongst local firms remains sluggish and despite a fall in the balance score, price pressures remain exceptionally high. In addition, whilst hiring activity has picked up, recruitment challenges are still ingrained for the majority of businesses attempting to add to their headcount.

“Driving investment into our region will remain a key priority for the year ahead and in March, we were delighted to see that more controls over the levers of economic growth were granted to the West Midlands Combined Authority.

“The GBCC has long called for greater devolution of powers at the regional level in order to unlock the potential that lies at the heart of the region – we look forward to working with the West Midlands Mayor and other key stakeholders to ensure the voice of business remains at the heart of this agenda.”

The report is sponsored by Birmingham City University, whose deputy vice chancellor Professor Julian Beer said: “The Chancellor of the Exchequer delivered his Spring Budget in March, which included a number of key measures designed to stimulate investment, such as capital allowances and support for research and development.

“The Q1 survey report indicates that whilst around one in three regional businesses had upwardly revised their investment plans for equipment (28 per cent) and training (32 per cent), concerns remained regarding the increased costs of goods and services, and difficulties in recruitment serving to limit growth.

“Whilst the economy will contract this year, the avoidance of a technical recession will come as some assurance to Greater Birmingham businesses, despite ongoing socio-economic pressures identified by Q1 survey respondents such as inflation (37 per cent) and interest rates (18 per cent).”

The launch of the report will focus on investment in Greater Birmingham and the role it will play in fostering an economic recovery post-pandemic.

The event will be held from 9am to 11am at Birmingham City University’s Curzon Building on Thursday, April 20.