Business confidence on the rise as cost pressures begin to ease – Chamber report
Businesses in Greater Birmingham are more confident about their prospects as concerns over inflation and cost pressures eased during Q2 of 2024, according to a major economic report released today.
Greater Birmingham Chambers of Commerce’s latest Quarterly Business Report reveals the region’s businesses are demonstrating an “underlying resilience” – with signs of economic stabilisation across several indicators, as well as a welcome fall in the number of firms reporting recruitment difficulties.
The Q2 report, sponsored by Birmingham City University, indicates fewer businesses are expecting the price of goods and services to increase over the next three months (38 per cent, down from 46 per cent in Q1).
Sixty-one per cent anticipate prices will stabilise, up from 53 per cent in Q1, in a growing sign that economic pressures are easing.
While fewer businesses added to their workforce or attempted to hire in Q2, the number reporting recruitment difficulties has plateaued – dropping to 63 per cent after reaching 72 per cent in the latter half of 2023.
Although export growth continues to lag behind UK sales, 57 per cent reported an uptick in export sales.
This was largely driven the manufacturing sector where 50 per cent of firms increased their overseas sales in Q2 – a 24 per cent uplift from Q1.
Henrietta Brealey (pictured), CEO of Greater Birmingham Chambers of Commerce, said: “Businesses across Greater Birmingham continue to demonstrate an underlying resilience despite the challenging fiscal pressures many face on a daily basis.
“Export sales indicators revealed most improvements compared to last quarter, with a notable difference between manufacturing and service sectors.
“Turnover and profitability projections along with domestic sales activity remains broadly in line with the activity we saw recorded at the start of the year. Recruitment confidence has diminished slightly, though recruitment difficulties continue to plateau which is a much-welcomed trend given the high levels of uncertainty businesses faced in this area last year.
“Price pressures have eased, particularly for manufacturers, reflecting broader economic stabilisation and the continued fall in businesses’ concerns about inflation, although this still remains a key point for consideration for one in four firms across all sectors.
“Investment levels have largely remained steady and we expect an improvement across a number of areas as national indicators related to GDP and inflation continue to improve.
“With the general election out of the way, businesses will be looking forward to the new Government setting out their plans to drive economic activity, unlock investment and raise productivity levels – all in all, a period of stability to give businesses the platform they need to invest and grow would be an ideal tonic to the uncertainty they’ve faced for a number of years.”
Professor Harris Beider, Pro Vice-Chancellor, Engagement, Enterprise and Innovation Engagement, at Birmingham City University, said: “The Q2 report indicates broad levels of economic stabilisation, demonstrated by the easing of price pressures, improvements in business confidence, and a lower proportion of businesses reporting concerns regarding inflation.
“Investment levels have largely remained stable. However, recruitment rates experienced a decline, whilst employment rates remained slightly below the national average.
“Reflecting the theme of the report, investment in infrastructure exemplified by the development of Digbeth Loc film studios will serve to support the region’s long-term growth; whilst Mayoral pledges for improvement in transport connectivity, fostering international trade relationships, and leveraging major events will be key drivers in sustaining this momentum and ensuring Greater Birmingham's competitive position on the global stage.”
The Q2 report will be launched at Birmingham City University’s Curzon Building on Thursday 18 July, when guest speakers Tom Screen, aviation director at Birmingham Airport, and Richard Eccles, partner at RSM, will discuss ‘Greater Birmingham on the global stage’.
