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Businesses showing resilience in wake of Brexit

29 September 2016

Businesses in Greater Birmingham have been praised for showing resilience in the wake of Brexit after a key quarterly survey revealed an ‘optimistic’ outlook across the region.

The Greater Birmingham Chambers of Commerce Business Report for the Third Quarter, in partnership with Birmingham City University, showed that businesses are moving on from initial concerns about Brexit.

Overall business confidence remained buoyant, with 61 per cent of companies expecting to improve their turnover in the next year.

Paul Faulkner (pictured), chief executive of Greater Birmingham Chambers of Commerce, said: “It’s encouraging that the region is feeling optimistic post-Brexit.

“While there was a drop in the proportion of firms reporting an increase in domestic sales - perhaps reflecting the immediate uncertainty following the vote - advance orders are back on trend and confidence remains strong.

“This is a testament to the resilience of Greater Birmingham businesses. However, given some lingering concerns about Brexit, it is not surprising to see that the proportion of firms looking to increase their investment and training budgets dipped this quarter.

“We hope to see greater clarity on the Government’s industrial strategy, investment in infrastructure and investment in the region at the Autumn Statement to further boost confidence amongst British business.

“We know that trading internationally has rarely been more important for the business community. That is why we have just launched the GBCC International Hub, offering comprehensive international trade support.”

However, the report indicated that while more than half of firms in Birmingham (55 per cent) are attempting to recruit new staff, 60 per cent are struggling to finding the right people.

Other figures in the report showed domestic sales for both services and manufacturing firms fell in the immediate aftermath of the referendum.

But manufacturers in particular have bounced back, with 44 per cent recording increased orders, up from 33 per cent in last quarter and the export market continued the same trend. Thirty-one per cent of manufacturers said overseas sales had increased, compared with 29 per cent in Q2 and orders also improved to 38 per cent compared with 32 per cent.

The value of pound sterling appears to have benefitted exporting manufacturers, although a significant number of companies across all sectors cited exchange rates as a concern.

Investment plans for equipment across all sectors remained low, with those expecting to increase their buying dipping to 16 per cent compared with 24 per cent in Q2. Training was also hit, with a quarter (25 per cent) saying they planned to increase their investment – a five per cent drop on the previous quarter.

Professor Julian Beer, deputy vice-chancellor at Birmingham City University, said: “Export growth, particularly in the manufacturing sector, appears to be benefiting from Sterling’s depreciation. However, exchange rate volatility is a key concern for the future.

“Overall business sentiment is positive, despite the continued lack of any definition of Brexit, the process of how it will be achieved and when it will be triggered.”

Leading business figures will debate the Chamber Business Report at a breakfast event at Birmingham City University on 11 October (7.30am to 9.30am).

Speakers will include Birmingham Airport chief executive Paul Kehoe, Professor Paul Forrest, director at West Midlands Economic Forum, and Henrietta Brealey, director of policy and strategic relationships at GBCC.

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