Firms remain buoyant despite global and domestic challenges

Greater Birmingham Chambers of Commerce’s Quarterly Business Report for the third quarter reveals a significant number of firms are predicting an increase in turnover and profitability over the next 12 months.

According to the report, sponsored by Birmingham City University, 70 per cent of businesses surveyed expect a rise in turnover, while 77 per cent are forecasting a boost in profitability.

While the number of firms reporting an increase in domestic (39 per cent) and export sales (23 per cent) fell from the last quarter, both metrics fell remained positive overall and are in line with the figures seen at the end of 2022.

Also 44 per cent of firms reported that their domestic sales volumes have remained constant –- 11 percentage points higher than the previous quarter.

Recruitment remains a major challenge for businesses. The report highlights that 60 per cent of firms attempted to recruit, of which 72 per cent had difficulty doing so (up by four points from the second quarter).

The biggest concerns for businesses over the coming months are inflation (30 per cent), business rates (20 per cent), interest rates (15 per cent), competition (17 per cent), exchange rates (6 per cent) and taxation (12 per cent).

Henrietta Brealey, the chief executive of Greater Birmingham Chambers of Commerce, said: “Increased geopolitical tensions and economic uncertainty continue to dominate the external picture for businesses.

“Despite this, businesses in Greater Birmingham remain positive with the balance score for businesses predicting an increase in turnover and profitability over the coming 12 months remaining strong.

“Behind this confidence there were some notable changes this quarter. There was a fall in the percentage of businesses reporting an increase in domestic sales and export sales.

“However, balance scores for these metrics remained positive overall and in line with figures last seen towards the end of 2022.

“Investment intentions also remain relatively weak with the balance score for capex hovering at 51, perhaps reflecting the impact of the uncertain environment and continuing concerns regarding interest rates and inflation noted elsewhere in this quarter’s survey.”

Professor Julian Beer, deputy vice-chancellor at Birmingham City University, said: “Echoing a trend from previous quarterly surveys, the operating conditions for businesses remain challenging.

“At 6.7 per cent UK inflation remains high, whilst socio-economic conditions on the global stage continue to be precarious.

“Despite this, however, the analysis of findings indicates a level of constancy or stability across a number of business areas.”

The quarterly business report launch event,which focuses on growing the international brand of Greater Birmingham, takes place at Birmingham City University on November 21.