Business News Business News Latest news from Greater Birmingham Chambers of Commerce
Challenging times are ahead for businesses
Weak cash flow, high levels of debt and job losses are all on the horizon for Birmingham businesses, according to a major new economic report. According to the Birmingham Economic
Review, published by the Chamber and the University of Birmingham’s City-REDI, the city faces a number of economic and social challenges. In Birmingham, 47 per cent of those surveyed 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.
‘I’m confident that the city can prosper and adapt out of these challenging circumstances’
Eight per cent of the West Midlands’
businesses received a share of Coronavirus Business Interruption Loans (CBILS), worth £871.4m according to British Business Bank statistics.
Alongside its debt and weak cash flow woes,
the region experienced the highest number of employees being placed on furlough in the country, at 156,300. Adding further to the bleak jobs out look, the West Midlands experienced the second largest reduction jobs of any region. Despite this, business leaders remain
optimistic, as opportunities such as HS2 and the Commonwealth Games will present supply chain opportunities, and help restore region’s visitor economy. Chamber chief executive Paul Faulkner said:
“This year’s Birmingham Economic Review is very different to the last. While previous years
Tough time ahead: Paul Faulkner (left) and Simon Collinson
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. “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. But we are now among the hardest hit by the dual shocks of Brexit and Covid-19. Through our data and analysis, we map the monumental changes we have witnessed over the past year and look ahead to what must be a brighter future.”
To read the report in full, visit
www.greaterbirminghamchambers.com
Covid-19 poses
the biggest threat A second wave of Covid-19 poses a bigger threat to Midlands businesses than a no-deal Brexit, according to the monthly ‘Rethinking the Economy’ survey by accountancy and business advisory firm BDO. The report revealed that businesses are more
concerned about the impact of the ongoing global pandemic, despite the country entering the final three months of an agreed transition period before the UK leaves the EU’s customs union and single market on 31 December. However, only 28 per cent of respondents
thought that a no-deal Brexit was a more immediate risk to the UK economy than Covid, with 70 per cent saying the latter posed a more serious threat. BDO partner Tim Foster said: “The Covid-19
pandemic clearly presents an ongoing threat to Midlands businesses. “With very little detail on what a potential
Brexit deal could look like – and how comprehensive and far-reaching it might be – it’s clear that Midlands businesses have placed the UK's transition away from the EU further down on the agenda However, with the clock ticking, it’s essential that companies prepare themselves for life outside of the EU, addressing key challenges such as supply chains, workforce, VAT registrations and cashflow. “While Midlands companies cope with a
myriad of political and socio-economic challenges, what is encouraging is that nearly a third of businesses still expect to expand their workforce in the next fiscal year, indicating recovery as they rebuild workforces.” The BDO report also revealed that an
overwhelming 95 per cent of Midlands businesses think the Government will make progress in levelling up the regions in the next three years. West Midlands Council leaders submitted a proposal to the Government in August, demanding that Whitehall devolve more powers to the region.
November 2020 CHAMBERLINK5
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