Weak cash flow, high levels of debt and major labour market risks are on the horizon for Birmingham businesses, according to a major new economic report.
The Birmingham Economic Review, published by Greater Birmingham Chambers of Commerce (GBCC) and the University of Birmingham’s City-REDI, reveals the city will continue to battle a number of economic and social challenges through and out of the Covid-19 pandemic.
The report reviews Birmingham’s economic landscape, before and during the health crisis, as well as what lies ahead for the city.
According to the report, across Greater Birmingham 47 per cent of businesses reported a worsening cash flow position in Q3 2020, suggesting a significant proportion of businesses have little financial “buffer” remaining to absorb any further shocks.
Eight per cent of the West Midlands’ businesses received a share of Coronavirus Business Interruption Loans, worth £871.4million according to the British Business Bank statistics in the economic review.
Alongside its debt and weak cash flow woes, the Birmingham City Council region experienced the highest number of employees being placed on furlough in the country, at 156,300 – more than a quarter of jobs.
Adding further to the bleak jobs outlook, the West Midlands experienced the second largest decrease in workforce jobs of any region.
Despite the sombre results of the report, leaders remain optimistic for the city’s future.
It says that opportunities such as HS2 and the Commonwealth Games will present supply chain business and help restore region’s visitor economy.
Paul Faulkner, chief executive of Greater Birmingham Chambers of Commerce, said: “This year’s Birmingham Economic Review is very different to the last.
“While previous years have focused on the remarkable renaissance that the city has experienced in recent times, this year reflects the significant impact that Covid is wreaking on our economy.
“It is clear that what lies ahead for Birmingham, as with most other parts of the country, is a tough road full of challenges, but also opportunity to grow and evolve past the Covid crisis.
“Despite what might be perceived as a sense of gloominess associated with this year’s Birmingham Economic Review, I’m confident that the city can prosper and adapt out of these challenging circumstances, and emerge stronger than ever.”
Professor Simon Collinson, deputy pro-vice-chancellor for regional engagement and director of the West Midlands Regional Economic Development Institute (WM REDI) and City-REDI at the University of Birmingham said: “Our city-region was enjoying a genuine renaissance before March, increasingly recognised as a desirable place to live and work. But we are now amongst the hardest hit by the dual shocks of Brexit and Covid.
“Through our data and analysis, we map the monumental changes we have witnessed over the past year; ‘before Covid’ and ‘during Covid,’ and look ahead to what must be a brighter future.”
To read the report in full.
For more information or interviews, please contact: Hasan Salim Patel, Communications Manager (Arts, Law and Social Sciences) or contact the press office out of hours on +44 (0) 7789 921 165.
For further information, please contact John Lamb, Greater Birmingham Chambers of Commerce Director of Press and PR, on + 44 (0) 121 274 3237; or mobile + 44 (0) 7971 144064
For interviews on this press release, please call Greater Birmingham Chambers of Commerce media hotline: + 44 (0) 121 274 3237.
The University of Birmingham is ranked among the world’s top 100 institutions, its work brings people from across the world to Birmingham, including researchers and teachers and more than 6,500 international students from over 150 countries.
Greater Birmingham Chambers of Commerce
Greater Birmingham Chambers of Commerce is one of the UK’s oldest and largest Chambers. It has over 3,000-member companies that employ over 200,000 plus affiliate organisations representing 15,000 people. It offers extensive services to industry and commerce, having served the interests of business for three centuries, promoting trade locally, nationally and internationally.
Members of Greater Birmingham Chambers of Commerce: Birmingham Chamber of Commerce, Burton & District Chamber, Cannock Chase Chamber, Lichfield & Tamworth Chamber, Solihull Chamber, Sutton Coldfield Chamber of Commerce, Asian Business Chamber of Commerce, Future Faces Chamber of Commerce, the Greater Birmingham Transatlantic Chamber of Commerce and the Greater Birmingham Commonwealth Chamber of Commerce.