Firms still facing an anxious time despite positive signs

Where is the year going?, writes Henrietta Brealey.

I 've blinked and we 've gone from Christmas to a quarter of the way through 2022.

And what a year it is turning out to be.

It certainly feels like the local business community is making up for Covid-lost time. Events, networking and engagement are back with a-vengeance. In March alone, I feel like I 've seen as many people in person as I saw on Zoom over the last two years - with over 1,200 people attending the Greater Birmingham Chambers of Commerce Awards on the fourth, the c.700 set to stop by our Spring Expo on the today (March 31) and a whole lot else in between.

The city has returned to life too. The Birmingham 2022 Festival got off to a phenomenal start with Wondrous Stories in Centenary Square. I honestly don 't think I 've ever felt prouder of this city than when watching that incredible, intriguing, acrobatic showcase of the region 's talent (and as anyone who knows me knows, I 'm vocally proud of Brum already so that 's saying something!).

Based on the conversations around me at Wondrous Stories, visitors are very much returning to the city as well. In fact we had one very high profile visitor, Ambassador Philip T. Reeker from the US Embassy, London, visit just last week. In speaking with c.90 Chamber members with an interest in US-UK Trade, Ambassador Reeker lauded the shared opportunities in low carbon economy industries and gave a good shout out for the Commonwealth Games too.

And this momentum is coming across in the numbers. According to the Chambers ' Quarterly Business Report (QBR) for Q1 - the largest regular business sentiment survey (aka “temperature check ”) in the city-region - there 's a lot to be positive about.

Fifty-four per cent of local businesses saw their domestic sales increase over the last quarter with only 10 per cent seeing a decrease, 50 per cent expect their workforce to increase over the next three months and 66 per cent of firms are confident that their turnover will increase over the next year.

We 'll be exploring these results at our Quarterly Business Report launch event on the April 27, when we will be joined by top figures from not one but two once-in-a-generation-scale investments in the region: David Grady, CFO, B2022 Organising Committee, and Ruth Todd, chief commercial officer of HS2, at an event taking place at STEAMHouse BCU. To reserve a place go to www.greaterbirminghamchambers.com

But - and of course there is a but. In and amongst the positivity there are real challenges. Hard hit industries such as hospitality and manufacturing are being impacted once again by the rampant increases in energy costs and raw material prices. Back to the QBR - 50 per cent of firms surveyed expect the price of goods and services to increase over the next three months, a third now cite inflation as more of a business concern than three months ago.

Of course these issues are being exacerbated by Russia 's invasion of Ukraine. At the front of everyone 's mind is the humanitarian crisis and heartfelt desire to support the people of Ukraine. But there 's no denying it is also adding additional anxiety for businesses at home.

Last week, the Chancellor had the opportunity to get ahead of these concerns, recognise and start to address the rapidly rising cost of doing business in the UK. A challenge many feel he did not entirely rise to on this occasion.

One of our members, Rebecca Durrant, tax partner at Crowe, summed it up pithily: “Rishi Sunak did not back track on the increases to National Insurance and dividend tax rates, meaning that income yields for investors will reduce, net pay for middle earners will shrink and profit extraction for business owners will be more expensive ”.

And that 's before we get to the pressures on hospitality being exacerbated by returning to the 20 per cent VAT rate for food and non-alcoholic drinks, accommodation and admissions to attractions, the expectation of two further increases to the energy price cap this year and the number of businesses still grappling with depts accrued due to COVID-19.

Based on what we are hearing from our members, far more significant action is needed - particularly on the thorny issue of business rates where reform has been mooted, but not fully grasped, for far too long.

The Chamber will continue to keep our members informed of the latest developments, tell their stories and give a voice to their needs - while doing what we do best and keeping up the fun side of doing business; opportunities to build networks and meet potential clients, learn about the latest business practices and trends and do business as it 's done best: together.

So, all in all, there is still a lot to be positive about. My final thought is borrowed from Birmingham City Council 's B2022 tag line - because in strange old times why not Be Bold, Be Birmingham.

Henrietta Brealey is chief executive of Greater Birmingham Chambers of Commerce

This column first appeared in the Birmingham Post