Shock, Risk and Resilience: The Birmingham Economic Review (BER2020) Provides a Snapshot of a City-Region Disrupted

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“According to the report, across Greater Birmingham 47 per cent of businesses reported a worsening cash flow position in Q3 2020.”


The Birmingham city-region was enjoying a genuine economic renaissance before March 2020, with significant growth in productivity and record levels of inward investment. It was increasingly recognised as a desirable place to live and work. The BER2019 edition last year highlighted the need to maintain this growth momentum while rebalancing our regional economy. Despite strong economic growth, generating more wealth as a region, this wealth remained very unevenly distributed. Rebalancing meant reducing persistent, high levels of inequality.

Since then we have lived through unprecedented disruption and the region faces an on-going series of health-related, economic and social challenges. This has already driven a further widening of the gap between ‘winners and losers’ in the region and nationally.

Birmingham and the West Midlands are amongst the hardest-hit city-regions in the face of the dual shocks of Brexit and particularly Covid, with dramatic falls in business revenues, consumer footfall, production, employment and confidence. BER2020, compiled by City-REDI in partnership with the Greater Birmingham Chambers of Commerce and launched on the 20th October, presents data and analysis to map the monumental changes we have witnessed over the past year; ‘before Covid’ and ‘during Covid.’ We also look ahead to what must be a brighter future.

Pre-Covid, there were plenty of signs of a virtuous cycle of growth, with a booming visitor economy, marked growth in professional jobs, and increased jobs in services and technology sectors. R&D-intensive sectors, firms and jobs were on the rise, driven by private investment and in contrast to a deficit of public R&D investment compared to other UK regions. Gross Value Added (GVA) per Capita (a productivity measure) was growing at over 6% and we were the second-best performing UK city for foreign direct investment outside London.

But lockdown stalled our economy in an unprecedented way:

  • 48% reduction in city centre footfall (in August compared to pre-lockdown levels)• 71% of Greater Birmingham businesses saw a fall in domestic sales (in mid-2020)
  • 79% of eligible West Midlands accommodation & food services roles have been furloughed
  • 69% of eligible West Midlands arts, entertainment, recreation & other services roles have been furloughed.

By local authority, Birmingham has the largest regional economy outside of London and has had the highest number of employments furloughed with 156,200 (35% of eligible jobs). In the year to June 2020, the West Midlands saw the second-largest decrease in jobs of any region (74,000) after the South East. This triggered a 68% increase in the Birmingham unemployment claimant count Feb-Aug 2020, and pushed the youth unemployment claimant rate to 19.4% by August 2020. Further afield, but still impacting the city-region economy, there was a 40.2% decrease in UK car production in Jan-August 2020 compared to this period in 2019, hitting this region particularly hard.

Health risks from the pandemic have triggered economic shocks through the lockdown, creating bankruptcies and growing unemployment. This in turn is driving a cascading impact on lower-income communities and vulnerable households. Prior to the pandemic the region had relatively higher levels of youth unemployment and the second-lowest level of average household income in the UK, with over one hundred-thousand households in the region that were workless, with dependent children. These numbers and the personal challenges that they represent are now worsening. 

Looking ahead, the region very much needs to regain its growth momentum and there are significant opportunities to achieve this. HS2, the Commonwealth Games, growth in leading industry sectors, from life sciences to new energy technologies and advanced manufacturing. These are opportunities to position the city on the world stage to attract business investment and talent to the region. This is going to require a collective effort to manage a difficult balance; to protect the vulnerable, safeguard firms, jobs and households while investing in recovery. All of which requires a clear awareness of the main risks and the agility to adapt responses as the situation changes, to improve our resilience. 

Attempts to cope with the current pandemic partly rest on the work of epidemiologists. They are experts in the ‘study (scientific, systematic, and data-driven) of the distribution (frequency, pattern) and determinants (causes, risk factors) of health-related states and events in specified populations.’ Precise and effective interventions require robust, accurate data and evidence to guide policy responses and people’s behaviour. This applies equally in designing and delivering the kinds of economic growth policies that can help this and other regions recover. Coping with both the pandemic and its economic and social impacts, requires expertise, data and evidence to underpin more intelligent interventions. This is where civic universities can help, in collaboration with partners across the city-region, and this is where we are focusing our energy and resources.