Greater Birmingham businesses end 2016 on a high

BUSINESSES in Greater Birmingham ended the final quarter of 2016 in a far more upbeat tone than had been expected.

The end-of-year performance was described as “remarkable” by the chief executive of the Greater Birmingham Chambers of Commerce (GBCC).

The GBCC Q4 economic survey showed all business sectors made a solid contribution, helping ensure the West Midlands out-performed the rest of the UK.

Confidence among manufacturers that turnover would improve in the next 12 months soared to 72%, the highest figure for at least two years. And the percentage of firms expecting to improve profitability improved from 50 to 62.
 
The mood was also buoyant in the service sector where 68% of firms expected turnover to improve, compared with 62% in the previous quarter, and 61% (against 55%) were confident that profitability would increase.

GBCC chief executive Paul Faulkner said the survey reflected a growing confidence and determination among firms in the area.

“This does show the remarkable resilience and determination of companies in the region and demonstrates that Greater Birmingham is open for business since the Brexit vote,” he said.
 
“Businesses ability to bounce back and sustain performance never ceases to amaze us and it’s a huge feather in their cap to outshine the rest of the UK.”

In the manufacturing sector, all factors for sales at home and abroad have shown an upturn, with 38% of firms – up 4% on Q3 – reporting increased sales in the UK while 48% (against 44%) had increased orders.

However, it was the export market which was the star performer for manufacturers, with 48% – the highest figure all year – reporting increased sales. Orders remained static at a 38% increase.

Just over half of manufacturers (51%) – the highest figure for two years – expect to increase their workforce in the next three months but 65% of all firms said they had experienced difficulties in recruitment over the past quarter.

In the service sector, half (50%) of firms showed an increase in sales against 39% in Q3, while improved order books were returned by 44% of firms in the sector – an increase of 9% on Q3.

Export figures also improved with 35% increasing sales in the last three months (up 8% on Q3) and 40% (26% in Q3) increasing orders.

But the labour market in the service sector, which includes distribution, hotels, catering, transport and communication, remained challenging, with 100% of firms surveyed stating they were having difficult in recruitment.

Mr Faulkner added: “It is encouraging that both manufacturers and service firms saw a welcome upturn in their domestic and international output, a marked contrast to the understandable air of caution which permeated business decision making prior to and after the EU referendum.
 
“Businesses are also displaying signs of optimism for 2017, countering concerns about ongoing uncertainty and the fiscal constraints which enveloped the Chancellor’s Autumn Statement.
 
“Now is the time to build on this optimistic sentiment and ensure that the structures are in place for our region to fulfil its potential.”