Pledge to keep fighting for business recovery

Businesses in Greater Birmingham made a remarkable partial recovery in the last quarter of 2021, a new report reveals today.

Chief executive Henrietta Brealey
Chief executive Henrietta Brealey

The area's business leaders have pledged to keep the momentum moving in the face of pressures in key areas.

Greater Birmingham Chambers of Commerce said its quarterly business report has recorded the highest proportion of businesses reporting an increase in UK sales since records began in 1997.

There were 54 per cent of firms reporting an increase and 35 per cent remaining constant

Export sales also increased – 37 per cent reported that they have risen and 48 per cent remaining constant – but orders fell compared to the previous quarter from 44 per cent experiencing an increase to 36 per cent.

However, there were severe problems in recruitment during the period with 60 per cent of firms reporting that they had attempted to recruit, of which 76 per cent had difficulties recruiting – the highest level since the thrid quarter of 2007.

Cashflow painted a better picture, with 35 per cent reporting that it improved over the last three months – up from 15 per cent in the final quarter of 2020.

Also 50 per cent expecting prices to increase over the next 12 months, rising to 77 per cent for manufacturers.

One of the main concerns for 33 per cent of businesses was about inflation, which was rising alarmingly towards the end of the year.

The proportion of manufacturers decreasing the amount invested in capital expenditure rose this quarter, while services sector saw a rise in the proportion of firms that had cut the spend on training.

Confidence, however, remained strong with 71 per cent expecting an increase in turnover in the next 12 months (72 per cent for services, 67 per cent for manufacturers).

Henrietta Brealey, chief executive of the GBCC, said: “The latest data reveals an upturn in domestic and international activity as we head towards the end of another extraordinary year, with a record number of domestic sales and an increase in export sales to a level that we haven’t seen since early 2019.

“However, this is offset by the highest increase in price pressures on record, as well as a stark rise in recruitment difficulties experienced by local businesses.

“Nevertheless, with the emergence of the Omicron variant, we understand that a sense of uncertainty will continue to pervade business thinking in the coming months.

“That’s why, as a chamber, we will continue to play our part in keeping business moving.”

Professor Julian Beer, deputy vice-chancellor of Birmingham City University who support the report, said: “The figures for the fourth quarter of 2021 provide cause for cautious optimism. Sales and forward orders for the majority of businesses remained stable or grew; whilst businesses remained confident in turnover and profitability, despite growing concern about cost increases and inflation.

“The ongoing impact of the Covid-19 pandemic and current Government strategy such as Build Back Better, underline the vital importance of innovation."

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