The West Midlands is well-placed to counter disruptions caused by the war in Ukraine, business leaders have said.
The annual Birmingham Economic Review by the Greater Birmingham Chambers of Commerce and the University of Birmingham City Region Economic and Development Institute highlights the “once in a generation” issues such as the energy crisis.
But the report adds that significant opportunities lie ahead for the region’s business sector.
Henrietta Brealey, Greater Birmingham Chambers of Commerce chief executive, said: “Brexit, Covid-19 – recent years’ editions of the Birmingham Economic Review have all opened with reflections on once in a generation events, unprecedented global disruptions and their impact on the local business community.
“And following Russia’s brutal invasion of Ukraine precipitating an energy crisis this, our sixth edition of the Birmingham Economic review, continues that extraordinary precedent.
“The resilience of the local business community continues to be tested but there remain significant opportunities for the city region, not least in ensuring we make the most of the legacy benefits of the Birmingham 2022 Commonwealth Games.
“We must also maximise the connectivity benefits of investment in both HS2 and localised transport infrastructure, and capitalise on associated opportunities in business decarbonisation and energy resilience.
“While challenges persist, we are encouraged to see positive sentiment about the future of the region reflected in commentary throughout this report from academics, industry leaders and experts.”
The report cites a number of challenges facing the business sector, including record numbers of firms under pressure to raise prices driven by energy costs and staff shortages.
It comes as the cost of living crisis continues to bite as inflation soars, driven by price surges in food, energy and fuel.
Regional unemployment rates decreased from the highs of the pandemic, with the West Midlands rate for the three months to July 2022 at 4.7%, down from 6.5% for the fourth quarter of 2020.
Professor Simon Collinson, deputy pro-vice-chancellor for regional engagement and at the University of Birmingham, said the region had been “hit harder than most”.
“The UK has now experienced a series of economic shocks from Brexit, through the Covid pandemic, the Ukraine situation and subsequent increases in energy costs and food prices to ongoing uncertainties around interest rates, debt and the strength of our currency.
“The West Midlands region has been hit harder than most by the effects of these shocks. Once again, lower income communities are feeling the impact most and we are seeing a growing polarisation between deprived communities and those with the capital assets, skills and income to ride through the downturn.
“There are significant growth opportunities in the region, many of which would also improve inclusivity.
“Future growth, which is sustainable and inclusive, partly depends on improvements in our regional innovation infrastructure, which in turn depend on improvements in our skills base.”