Businesses in Greater Birmingham are demonstrating resilience against a host of economic challenges – with many predicting an upturn in profits during 2023, according to a new report released. Greater Birmingham Chambers of Commerce’s Quarterly Business report for Q4 reveals “cautious optimism” across the region – despite the impact of the war in Ukraine, unprecedented cost pressures and ongoing recruitment challenges.
In total, 54 per cent of firms expect their turnover to improve over the next year (an increase of two per cent from Q3), while fewer are forecasting a fall in profitability (25 per cent down from 31 per cent in the previous quarter). More than half (54 per cent) also expect their profits to rise in the same period (up from 52 per cent in Q3).
While both services and manufacturing firms are still struggling to recruit staff, 30 per cent of businesses across the two sectors added to their head count during Q4 – up from 24 per cent in the previous quarter. Looking ahead to the next three months, 33 per cent of businesses expect to add to their head count (up from 31 per cent in Q3).
However, both sectors are facing further cost pressures. Fifty-eight per cent of businesses predict their prices will go up (55 per cent in the previous quarter) – citing labour costs (26 per cent) and fuel prices (17 per cent) as the main reasons.
Henrietta Brealey, chief executive of Greater Birmingham Chambers of Commerce (GBCC), said: “Despite these well documented challenges, cautious optimism abounds as we enter 2023.
“It’s heartening to see that the majority of businesses expect their profits and turnover to go up over the next 12 months. Domestic sales remain anchored in positive territory, export activity picked up this quarter for service firms and we saw a greater number of businesses investing in training their staff this quarter which underlines the durability and resilience of the Greater Birmingham business community.”
Sponsored by Birmingham City University, the GBCC’s Quarterly Business Report is an up-to-date snapshot of the performance of the region’s business community. It is the most comprehensive report of its kind in the Greater Birmingham area and is underpinned by data on key indicators such as sales, exports, investment intentions and the workforce.
Professor Julian Beer, deputy vice-chancellor at Birmingham City University, said: “The fourth business survey of 2022 provides an opportunity to reflect on the calendar year just gone.
“It is clear that businesses in the Greater Birmingham economy, in common with the national picture, have been tested by rising inflation, and the cost-of-living crisis against the backdrop of continued post-pandemic recovery. For example, annual trends revealed reduced confidence in turnover and profitability, and decreased sales and forward orders.
“Looking forward, whilst the survey reflected some buoyancy in terms of a quarterly uplift in efforts to recruit and improved cashflow, there is little doubt that 2023 will retain some of the challenging economic headwinds for the regional business base that typified the preceding year.” The Q4 Quarterly Business Report launch event will take place on 7 February at Birmingham City University and will focus on Growth Trends in Greater Birmingham – book a free place.