Businesses in Greater Birmingham made a remarkable partial recovery in the last quarter of 2021, a new report reveals. And business leaders today pledged to keep the momentum moving in the face of pressures in key areas.
Greater Birmingham Chambers of Commerce (GBCC) said their Quarterly Business Report recorded the highest proportion of businesses reporting an increase in UK sales since records began in 1997.
Fifty-four per cent of firms reported an increase and 35 per cent remaining constant
Export sales also increased. Thirty-seven 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. Sixty per cent of firms reported that they had attempted to recruit, of which 76 per cent had difficulties recruiting- the highest total since Q3 of 2007.
But cashflow painted a better picture, with 35 per cent reporting that it improved over the last three months - a great leap from 15 per cent in Q4 of 2020. And 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). But more were less certain about profitability – 57 per cent expecting an increase compared to 61 per cent in Q3.
Henrietta Brealey (pictured), 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.
“In this context, I am confident that the opening of new facilities such as the GBS Institute of Technology and the BCU STEAMhouse innovation centre, coupled with the expertise of our regional business base, will support innovation-led recovery.” The GBCC’s QBR event takes place on Wednesday, 19 January, at 6pm.