Businesses across Greater Birmingham have seen a mixed start to 2025 - with sales in the manufacturing sector hit by a "challenging environment" and new US trade tariffs, according to newly published research.
The pressures on manufacturers are revealed in Greater Birmingham Chambers of Commerce's Quarterly Business Report for the first three months of 2025 as industry geared up to face the effects of trade tariffs imposed by President Trump.
However, many firms remain cautiously optimistic about sales growth despite a lowering of profit expectations according to the quarterly report which provides a barometer of West Midlands business sentiment.
The report has seen business leaders call for a new "roadmap" to reduce costs, reform business rates and boost trading conditions as 2025 unfolds.
Henrietta Brealey, chief executive of Greater Birmingham Chambers of Commerce, said: "The latest Quarterly Business Report highlights a mixed start to 2025 for Greater Birmingham businesses.
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"Following the positive direction of travel on domestic demand at the end of 2024, sentiment has dipped slightly which has been driven by a notable decline in sales within the manufacturing sector.
"While the services sector proved more resilient, the overall domestic environment has proved challenging when it comes to stimulating business growth.
"Export demand has also weakened, which will have been partially driven by the uncertainty created by President Trump's recent and expected announcements of tariffs on a range of º£½ÇÊÓƵ exports to the United States."
The economic survey, produced in partnership with Birmingham City University, reveals that the first quarter of the year has seen a slight dip in domestic sales growth with 44 per cent of respondents increasing their º£½ÇÊÓƵ sales volumes in the first quarter, marking a fall of three percentage points since the final quarter of 2024.
Meanwhile, 36 per cent cite that their domestic sales remained constant throughout the first quarter - up from 35 per cent in Q4 - while 20 per cent have seen a decrease.
The fall in domestic sales demand has been felt most acutely by manufacturers with just 31 per cent reporting an increase in sales in the first quarter.
The survey shows that the first quarter has seen a downturn in business confidence amongst exporters with just 27 per cent of respondents seeing an increase in export sales, a decrease from 33 per cent the previous quarter.
Meanwhile, 58 per cent of respondents said their export sales remained constant during the first quarter while 15 per cent saw a decrease.
Raj Kandola, director of external affairs at the chamber, added: "The Chancellor's self-imposed fiscal rules leave very little headroom as we approach a crucial period for businesses.
"At the recent Spring statement, the Chancellor made it clear that taxes would not go up - businesses up and down the country no doubt breathed a sigh of relief given the disproportionate impact they suffered from the announcements made in the October budget.
"However, as our latest analysis shows, concerns around corporate taxation remain prevalent as businesses begin to adapt to the changes in the National Insurance framework and the national living wage."
