Inflation poses a risk as firms report partial recovery in trading - The Solihull Observer

Inflation poses a risk as firms report partial recovery in trading

Solihull Editorial 30th Dec, 2021   0

BUSINESSES in Greater Birmingham made a remarkable partial recovery in the last quarter of 2021, a new report reveals today, Thursday, December 30.

And business leaders have pledged to keep the momentum going in the face of pressures in key areas.

Greater Birmingham Chambers of Commerce (GBCC) said their Quarterly Business Report recorded the highest proportion of firms reporting an increase in UK sales since records began in 1997.

In all 54 per cent of firms reported an increase with 35 per cent remaining constant.




Export sales also increased.

Some 37 per cent of businesses reported they had risen with 48 per cent remaining constant, but orders fell compared to the previous quarter (from 44 per cent experiencing an increase to 36 per cent).


However, there were severe problems in recruitment with 60 per cent of firms saying they had attempted to recruit, of which 76 per cent had difficulties finding the right person, the highest total since Q3 of 2007.

Cashflow painted a better picture, with 35 per cent reporting it had improved over the last three months – a great leap from 15 per cent in Q4 of 2020.

However 50 per cent expected prices to increase over the next 12 months – rising to 77 per cent for manufacturers.

One of the main concerns for 33 per cent of businesses was inflation, which has risen alarmingly towards the end of the year.

The proportion of manufacturers decreasing the amount invested in capital expenditure rose this quarter, while services sector saw a rise in firms cutting the spend on training.

Confidence, however, remained strong with 71 per cent expecting an increase in turnover in the next 12 months (72 per cent for services, 67 per cent for manufacturers).

But more were less certain about profitability – 57 per cent expecting an increase compared to 61 per cent in Q3.

Henrietta Brealey, chief executive of the GBCC, said: “The latest data reveals an upturn in domestic and international activity as we head towards the end of another extraordinary year, with a record number of domestic sales and an increase in export sales to a level that we haven’t seen since early 2019.

“However, this is offset by the highest increase in price pressures on record, as well as a stark rise in recruitment difficulties experienced by local businesses.

“Nevertheless, with the emergence of the Omicron variant, we understand that a sense of uncertainty will continue to pervade business thinking in the coming months.

“That’s why, as a Chamber, we will continue to play our part in keeping business moving.”

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