A “positive sentiment” is coursing through the veins of Greater Birmingham businesses as they recover from Covid-19 but challenges remain, including staff shortages, rising prices and supply chain disruptions.
That is the verdict of the latest quarterly business report from Greater Birmingham Chambers of Commerce (GBCC), which has been debated online.
The report, supported by Birmingham City University, shows that as national restrictions continue to ease, the UK economy remains on track to bounce back as the release of pent-up consumer demand should help to power a surge in activity throughout the rest of the year.
Rising prices and supply chain disruption are likely to have a knock-on impact on any projected recovery and if labour and supply shortages are prolonged there will be a noticeable impact for firms to meet customer demand, the report says.
And price pressures are the largest on record for the past 24 years while cash flow issues while cash flow remains weak.
Henrietta Brealey, chief executive of the GBCC, said: “Surveying for our latest Quarterly Business Report took place after the majority of Covid-19 related restrictions had been lifted across the country and it’s great to see positive sentiment coursing through the veins of the Greater Birmingham business community.
“Domestic demand has risen to a level not seen since the end of 2018 and export sales, investment in capital expenditure and recruitment activity all mirror the levels we saw prior to the outbreak of the pandemic. Turnover and profitability projections have also continued their upward trajectory as businesses look ahead to the next twelve months.
“Also, a greater number of businesses are facing difficulties in attempting to add to their head count all of which is unsurprising given the supply and labour shortages we’ve seen exacerbated by the so called ‘pingdemic’ and post Brexit headwinds."
Professor Julian Beer, deputy vice-chancellor of Birmingham City University, said: “The figures for the third quarter of 2021 indicate a continued recovery of the Greater Birmingham economy, reinforced by anticipated uplifts in turnover and profitability over the next 12 months.
“Plans for investment in equipment and training were also at their highest levels since Q3 2019, providing further indication of business confidence, and underlining a role for providers such as BCU to support innovation and growth.
“However, whilst further economic recovery is anticipated over the next quarter, a note of caution also remains following the announcement of the Government’s plans of a toolkit of restrictions to counter a potential winter resurgence of the virus.”
Raj Kandola, the GBCC’s head of policy, said: “The percentage of firms that faced recruitment issues fell sharply during the pandemic (from 56 per cent in Q1 2020 to 26 per cent in Q3 2020). This was potentially linked to the number of redundancies that businesses made during this period and the fact that businesses had a larger talent pool of candidates to choose from.
“Nevertheless, that figure has continued to climb since Q3 2020 and the level in Q3 2021 exceeded the pre-pandemic figure (62 per cent in the current quarter compared to 56 per cent in Q1 2020).
“It is vital the Government formulates a clear strategy which will safeguard a longer-term economic recovery. In particular, we support the British Chambers of Commerce in calling on the Government to create a more flexible immigration system which can help to tackle labour shortages, alongside training and direct support for furloughed workers that are returning to the job market.”
Pictured: Henrietta Brealey
