The covid-19 pandemic and subsequent lockdown has cost thousands of Birmingham jobs and plunged employers into debt, according to a new report.
And the city's hospitality sector "cannot survive intact under current government restrictions without further support", warns a new report by the Greater Birmingham Chambers of Commerce and Birmingham University's City Region Economic and Development Institute.
Despite the gloomy outlook, business leaders remain optimistic and highlight developments such as the 2022 Commonwealth Games and the arrival of HS2 as measures that will help the city and wider region.
The Birmingham Economic Review highlights a wide range of issues, including:
- 156,200 people placed on furlough in Birmingham, 35 per cent of all eligible working people
- West Midlands has lost 74,000 jobs, the second-largest decrease in workforce jobs of any region behind the South East
- Approximately eight per cent of employers received a Coronavirus Business Interruption Loan worth £871.4 million
- Quarter of West Midlands businesses experienced an increase in mental health concerns among staff, compared to the same period in 2019
- Number of people visiting Birmingham city centre in August was half the level before the pandemic began
- West Midlands economy expected to contract by 9.1 per cent in 2020, compared with a wider UK contraction of 7.2 per cent, However, it is expected to rebound with 11.3 per cent growth in 2021
The report adds: "Despite significant attempts to adapt, there are clear warnings that the regional hospitality and visitor economy industries, which are critical to the success of upcoming opportunities such as the Birmingham 2022 Commonwealth Games, cannot survive intact under current Government restrictions without further support."
It also highlights the threat to the car industry once current trade arrangement with the EU ends on December 31.
It is possible a new trade deal could be in place by then but talks between the EU and UK have stopped because of disagreements.
Paul Faulkner, chief executive of Greater Birmingham Chambers of Commerce, said: "This year's Birmingham Economic Review is very different to the last.
"While previous years have focused on the remarkable renaissance that the city has experienced in recent times, this year reflects the significant impact that covid is wreaking on our economy.
"It is clear that what lies ahead for Birmingham, as with most other parts of the country, is a tough road full of challenges, but also opportunity to grow and evolve past the crisis.
"Despite what might be perceived as a sense of gloominess associated with this year's Birmingham Economic Review, I'm confident that the city can prosper and adapt out of these challenging circumstances, and emerge stronger than ever."
