Birmingham firms see signs of stability amid challenging environment
Consistency in the domestic and export markets ensured a more stable end to 2023 for Greater Birmingham businesses, according to a major new economic report released this week.
Greater Birmingham Chambers of Commerce’s latest Quarterly Business Report reveals domestic sales, export demand and turnover all remained relatively stable during Q4.
The report, sponsored by Birmingham City University, reveals 40% of firms saw an increase in domestic sales – up by one per cent on the previous quarter.
And the number of firms across all sectors reporting an increase in export sales was up five per cent on Q3, to 28%.
Both manufacturers and service firms experienced a welcome uptick in export sales, increasing by four per cent and five per cent respectively.
While there was a slight drop in the number of firms expecting an increase in turnover over the next three months (down one per cent on Q3 to 62%), just 11% anticipate a decrease.
Recruitment once again remains a major challenge for Greater Birmingham businesses, of the 56% of firms who tried to recruit during Q4, nearly three-quarters (72%) reported difficulties.
Henrietta Brealey, CEO of Greater Birmingham Chambers of Commerce, said: “Our QBR Index for the final quarter of 2023 indicates that, while not uneventful in the external environment, there were signs of welcome stability on key measures of local business sentiment.
Among both sectors combined, the domestic sales balance score remained in positive territory at 62. Export growth remained positive, albeit notably less strongly so at 54. Business confidence in improving turnover over the next 12 months remains high at a balance score of 76, with 62% of businesses predicting an increase in turnover.
She added: “Confidence in improving profitability was also positive at a score of 65, although notably weaker than the indicator for turnover.
A key contributor to this is no doubt the rising cost of doing business. 45% of respondents expect prices of goods and services to increase further over the next three months which, while down from its peak 12 months ago, is still significantly higher than the long-term trend.”
Jo Birch, director of Innovation, Enterprise, Employability and Business Engagement at Birmingham City University, said: “The fourth business survey of 2023 provides an opportunity to reflect on the calendar year just gone.
Businesses in the Greater Birmingham economy, in common with the national picture, have been tested by rising inflation, and interest rates – both of which remained the most commonly cited concerns across the year.”
She added: “However, there was also cause for optimism, exemplified by improved levels of cashflow when compared with 12 months ago, and a strengthened export market.
Looking ahead, however, it is likely that a number of challenging economic headwinds will remain, which could be further exacerbated by ongoing socio-political tensions and conflict such as war in the Middle East which could lead to domestic inflationary shocks.”
The Quarterly Business Report launch event for Q4 – in which guest speakers Mark Lupton, regional director for HSBC UK, and Wendy Merricks, CEO and founder of Jumar Solutions, will be discussing the entrepreneurial landscape of Greater Birmingham – takes place at Birmingham City University on Wednesday the 7th of February.