The annual
Birmingham Economic Review — published by the City-Region Economic and Development Institute (City-REDI) at the
University of Birmingham, and by the
Greater Birmingham Chambers of Commerce — paints a largely optimistic picture for the city, thanks to an improving economy, a resilient export market and the promise of further devolved powers. However, the review also warns of significant hurdles, including ongoing skills shortages, child poverty, and cost pressures arising from the recent Budget.
The 2024 report shows that the Birmingham city-region has increased its gross value added (GVA) contribution by 9.7% to £60.78 billion, with the value of goods exported from the West Midlands in the second quarter of 2024 being £8.8 billion; this is 1.4% higher than a year ago and 16% above pre-pandemic levels. Furthermore, prior to the Budget businesses were expressing optimism, with 65% saying they expected their turnover to rise next year and 57% predicting a profitability boost.
The report also says the arrival of HS2, more devolved powers through the West Midlands Combined Authority’s ‘Trailblaser’ devolution deal, and a Budget windfall of £1.5 million to drive economic growth should put the city-region ‘on an upward trajectory’. However, it warns that skills shortages persist, with 6.5% of working-age individuals lacking formal qualifications compared to the national average of 6.2%, adding that rising child poverty remains a barrier.
Henrietta Brealey (pictured above), Greater Birmingham Chambers of Commerce’s chief executive, said: “Prior to the Autumn Budget, the Greater Birmingham business community seemed to have been feeling a cautious optimism that the economy might be starting to recover from the disruptions of Brexit, the Covid-19 pandemic, and the subsequent energy and cost of living crises, with inflation softening, interest rates gradually declining, and UK business investment returning to pre-pandemic levels. However, post-Budget we have yet to see whether that is still the case.
“The significant increases in the tax burdens of many businesses may well put a damper on business confidence. Whether that can be offset by meaningful action on pledges on the importance of boosting infrastructure spend, tackling skills gaps, driving innovation, and continuing to turn the dial on regional devolution remains to be seen.”
She concluded: “Greater Birmingham is a place of many strengths, one that also has plenty more scope to grow to reach its full potential. The fundamentals that make the city-region a great place to invest and do business remain compelling.”