Businesses in Birmingham and Solihull are successfully fighting their way out of recession, a survey released today reveals.

The quarterly economic survey undertaken by Birmingham Chamber of Commerce and Industry (BCI) indicates that the business community in the region has overcome the worst period of trading for many years. The pace of decline in output and new orders has begun to ease although all areas of business were starting from extremely depleted orders.

Domestic manufacturing sales and forward orders, which recorded alarmingly low figures at the turn of the year, showed a 13 per cent increase. The service sector witnessed a similar upturn.

Export sales for manufacturers showed an improvement, with 31 per cent compared to 25 per cent in the second quarter recording increased sales. There was also a turnaround on their order books, which had increased by 31 per cent compared with 27 per cent. 

Exports in the service sector were much improved with 39 per cent of companies increasing sales compared with nine per cent in quarter two. Overseas orders were also up by 39 per cent compared with 12 per cent. 

BCI president Bridget Blow said: "The weak pound, which makes UK goods more competitive, has led to an increase in export sales in all sectors. However, as cheap and attractive as Britain's goods have become, our main trading partners in Europe and the US have been too deep in recession to be able to exploit this and these increases need to be sustained in the final quarter of 2009."

Unemployment in Birmingham has now reached 50,527 and in all sectors businesses reported that their workforce had decreased. They are also cautious about when growth will return, reflected in the low recruitment intentions.

Manufacturers were the hardest hit and nearly a third reported that their workforce was now smaller than three months ago.

The limited availability of credit continues to be a key concern, Thirty-seven per cent of manufacturers confirmed that their cash-flow had decreased compared with 25 per cent in the service sector.

Ms Blow said: "The Bank of England Monetary Policy Committee's introduction of Quantitative Easing in March has reduced bank lending concerns but questions remain over whether they have gone far enough.

"Rising levels of unemployment and a lack of job security continue to suppress demand in the economy. The BCI calls for government policy to focus on giving employers the flexibility and appropriate support to maintain workforce levels."

She added: "There are several other issues where the government can act to ease business worries and hopefully result in a more positive end-of-year survey

"We are calling on the Government to reconsider their plans to increase National Insurance Contributions by 0.5 per cent from April, 2011, and to opt against raising the National Minimum Wage above the rate of inflation.

"We also urge Government to reintroduce empty property rate relief for at least the next 12 months. This would bring much-needed relief to the business community, and potentially much benefit to regeneration and economic development activities.

"Business rates remain a substantial outlay for the majority of companies, particularly SMEs and more guidance is needed regarding the rating valuation for businesses."