Greater Birmingham economy grew 1.4 percent in 2023 led by Birmingham

The Greater Birmingham economy grew 1.4 percent in 2023, with Birmingham, Redditch and Cannock Chase driving the increase through strength in specialised construction and manufacturing.

That performance arrives at a time when global trade tensions and inflation at 4.1 percent in August 2025 have left many local companies delaying spending and hiring plans. Interest rates held at 4 percent add further pressure on borrowing costs for firms that already face weaker export demand.

Local firms feel the squeeze on spending and hiring

Business owners across Greater Birmingham & Solihull describe holding back on new equipment and staff training as orders from overseas soften. Several report turning instead to digital tools and process improvements to keep costs in check without cutting headcount. The pattern shows up most clearly in transport and storage, where the number of enterprises fell 14 percent last year.

At the same time, property and health-related businesses recorded modest gains, reflecting steady demand from residents who continue to spend on homes and care services. Household consumption has held up better here than in some other regions, according to the data.

Numbers point to steady enterprise base and research strength

Greater Birmingham & Solihull counted 72,620 enterprises in 2024, down only slightly from the year before. Business confidence in the region slipped from 12.9 in the second quarter of 2024 to 7.9 in the same period of 2025, sitting below the national average. West Midlands research spending reached £5.5 billion in 2023, the highest per-person total outside London and the Greater South East.

The West Midlands also secured 130 foreign direct investment projects in 2024-25, more than any other area outside London. New money announced for the Birmingham Knowledge Quarter and health technology projects adds further long-term capacity.

Companies that adapt quickly to digital tools and low-carbon processes stand the best chance of holding their ground. Local advisers recommend checking grant schemes for skills upgrades and energy efficiency before the next round of investment decisions.