The pace of recovery from the depths of recession has eased and business confidence in Birmingham has slumped, according to a new survey published today (September 30).

As a result, there is little prospect of Birmingham's position at the top of the unemployment league among core cities being threatened, reveals the latest economic survey from Birmingham Chamber of Commerce.

Manufacturers reporting increased home sales in the third quarter dipped from 49 per cent in Q2 to 37 per cent and advance orders were also down (43 per cent to 39 per cent).

But with a higher number of firms reporting no change, this represented a per centage balance increase of 26 in sales and 23 in orders.

Exports faired little better with firms increasing sales down to 33 per cent from 49 per cent. Only 32 per cent, against 43 per cent in the previous quarter were reporting fuller order books.

More firms said their sales and orders remained constant, giving per centage balance increases of 19 in sales and 23 for orders. 

But statistics from the labour market were causing most concern with only 27 per cent recording an increased workforce and only 18 per cent expected to take on more people over the next three months.

Will Rogers, the Chamber's policy adviser, said: "Unemployment in Birmingham stands at 11.6 per cent - the highest among core cities in the UK. It is extremely worrying that only  18 per cent said they had increased their workforce in the past three months and it represents a drop of 13 per cent.

"Very few businesses expect to be recruiting in the next three months. After increases in successive quarters, this setback can be directly linked to falling business confidence and we will be looking for an improvement in the final quarter of the year."

Figures for cashflow showed a slight improvement but anecdotal evidence suggested that businesses were more focused on paying down debts and accumulating cash reserves. 

In the service sector, UK sales were up with 46 per cent reporting an increase while 40 per cent had fuller order books. However, export sales remained constant with 48 per cent, the same as in the previous quarter, but forward orders were up from 40 to 45 per cent. Recruitment prospects also remained low.