Signs of stability for firms amid challenging environment

Greater Birmingham Chambers of Commerce’s latest quarterly business report reveals that domestic sales, export demand and turnover all remained relatively stable during the final three months of the year.

The report, sponsored by Birmingham City University, found that 40 per cent of firms saw an increase in domestic sales – up by one percentage point on the previous quarter.

The number of firms across all sectors reporting an increase in export sales was up five per cent on the third quarter to 28 per cent.

Both manufacturers and service firms experienced a welcome rise 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 the third quarter to 62 per cent), just 11 per cent anticipate a decrease.

Recruitment once again remains a major challenge for Greater Birmingham businesses.

Of the 56 per cent of firms who tried to recruit during the final quarter, nearly three-quarters (72 per cent) reported difficulties.

Henrietta Brealey, the chambers chief executive, 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 per cent of businesses predicting an increase in turnover.

“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 per cent 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.

“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 report launch at 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, will be taking place at Birmingham City University on Wednesday, February 7.