Export orders rebound but cost and hiring pressures persist in Q3 – Chamber report

Businesses in Greater Birmingham are showing resilience despite softer trading conditions, as recovering overseas orders offset a dip in export sales, according to a major new economic report.

Greater Birmingham Chambers of Commerce’s latest Quarterly Business Report reveals that export orders returned to positive territory in the third quarter of 2026, as the proportion of businesses reporting higher overseas bookings increased from 19 per cent to 21 per cent, while those reporting stable orders rose from 58 per cent to 64 per cent.

However, export sales weakened over the same period, with just 14 per cent of firms reporting higher overseas sales, down from 28 per cent in Q2.

The report, sponsored by Birmingham City University, also shows recruitment has become harder again.

Half of businesses (50 per cent) tried to recruit during the quarter, and 61 per cent of those struggled to find suitable candidates, up eight percentage points on Q2.

Raj Kandola (pictured), deputy chief executive of Greater Birmingham Chambers of Commerce, said: “Our latest Quarterly Business Report presents a mixed picture of business conditions across Greater Birmingham. Domestic demand weakened slightly, export sales fell to their lowest level since 2020 and confidence in future turnover eased.

“At the same time, there are encouraging signs beneath the headline figures. Workforce levels have remained broadly stable, cashflow has improved modestly and investment intentions have strengthened. Export orders have also returned to positive territory, offering some grounds for cautious optimism.

“The findings point to a business community that remains determined and adaptable, but increasingly stretched.

“Greater Birmingham’s firms want to invest, recruit and expand, yet many are balancing those ambitions against persistent cost pressures and economic uncertainty.”

The outlook for the year ahead is broadly steady. More than half of businesses (56 per cent) expect turnover to improve over the next 12 months, unchanged from Q2, and 47 per cent anticipate higher profits, up two percentage points.

However, manufacturers remain cautious, with the proportion expecting turnover to improve falling from 66 per cent to 40 per cent, after a strong second quarter.

Meanwhile, cost pressures remain stubborn – 45 per cent of firms expect to raise prices in the next three months, with labour costs (29 per cent) and utilities (19 per cent) the main drivers.

Inflation (27 per cent) and corporate taxation (25 per cent) are firms’ most common external concerns.

With the Autumn Budget approaching, the Chamber is calling on the Chancellor to help businesses turn ambition into growth.

Emily Stubbs, head of policy at Greater Birmingham Chambers of Commerce, said: “With growth remaining subdued this quarter, the Autumn Budget presents a key opportunity to address some of the barriers holding firms back.

“That means immediate relief through reform of business rates and support with energy costs, a clear and stable business tax roadmap, and continued investment in skills.

“Businesses across Greater Birmingham are not short of ambition. A Budget that reduces business costs, supports investment and provides long-term certainty would be a welcome step towards unlocking growth across the region.”

Heike Schuster-James, associate director of business development at Birmingham City University, said: “The Q3 survey results suggest export performance weakened over the quarter, particularly in manufacturing.

“However, the outlook for future export activity was somewhat more positive, with advance orders and bookings returning to positive territory, which may indicate some stabilisation in demand.

“Overall expectations for business performance over the next 12 months remain relatively stable, supported by the services sector.

“These findings highlight the role of effective business support and regional innovation clusters in helping firms start, grow and commercialise new ideas.”

The GBCC’s Quarterly Business Report provides a regular snapshot of business performance across Birmingham, Solihull, Sutton Coldfield, Lichfield and Tamworth, Cannock Chase and Burton-on-Trent.

It is the most comprehensive, regular report of its kind in the region.

A launch event for the Q3 report – focusing on ‘Supporting Entrepreneurship in Greater Birmingham’ – takes place on Thursday 22 October at Birmingham City University (9am to 11am).