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Booming Birmingham – all on the rise?

Booming Birmingham – all on the rise?

🕔01.Feb 2017

The ‘Booming Brum’ mantra was given a boost yesterday with news of more cranes and tourists, but economic and social challenges await the region’s first Mayor, writes Hannah Green

Chamberlain Files recently reported numerous ‘wins’ for the city in a bumper economic post, including the title as Britain’s ‘start-up capital’ and beating London to become the country’s leading city for business growth rates.

Some reports this week do nothing to dilute the excitement – especially in the city centre.

A Deloitte study reveals that Birmingham is ‘leading the way’ in city centre construction in front of the UK’s largest cities, with a 50% surge in office development on the previous year, as well as a 10-fold increase in residential property builds.

The report is summarised:

Birmingham city centre is expanding. Throughout last year we’ve seen a record number of cranes on the skyline and developers are busy forging ahead with new schemes in every sector. Financial and professional service firms are growing and with mounting activity around HS2 the city centre is stretching upwards and outwards to meet demand.

Key findings include:

  • 1.45m sq ft of office space under construction, a 50% increase on the previous year
  • 7 new office starts totalling 778,612 sq ft the highest number in our survey history
  • Surge in residential development with more than 2,300 units being delivered over the next three years
  • 1166 student bed spaces under construction up 40% on the previous year
  • 508 hotel beds under construction
  • 7 completed schemes since the last survey.

Leader of Birmingham City Council, Cllr John Clancy was interviewed for BBC Breakfast and was quick to refer to the cranes as an indicator of the levels of investment the city and region are enjoying.

Simon Marks, Board Director, Greater Birmingham and Solihull LEP, commented:

…[it] confirms what many of us have known for some time now – Birmingham is a city that is in the midst of an economic renaissance. Major developments like Arena Central and Paradise are changing the fabric of the city and have been made possible because of strong public-private partnership working and in a number of cases, the financial backing of the GBSLEP Enterprise Zone.

What’s really positive news is that this is just the beginning, with significant private sector investments such as 3 Snowhill, further Metro routes funded and major regeneration opportunities at Smithfield and around Curzon station.. Confidence remains high, despite recent political uncertainty, which is hugely encouraging.

The residential ‘boom’ doesn’t stop there.

Marketing Birmingham has today (re)reported the success of their tourist residency in 2016, with the highest hotel occupancy rates for the city on record (peaking 99%, averaging 75%), alongside the greatest improvement in perception of all major UK cities, with a growth of 23 percentage points in the last 12 months.

There has also been a significant increase in leisure visitors to the city, from 45% in 2013 to 76% in 2016.

Cllr John Clancy also commented on the news from Marketing Birmingham’s Regional Observatory:

These figures speak for themselves and demonstrate that Birmingham is consistently being seen across the world as a great place to visit, both for leisure tourism and business. Tourism is a major driver of the local economy. By enhancing our leisure offer, bidding for major events through the Birmingham Convention Bureau, and investing in world-class infrastructure as demonstrated by the redeveloped New Street Station – we help to create a sustainable future for our city.

Most importantly, the visitor economy fuels employment opportunities for the people of Birmingham, and makes the city better placed to attract major businesses and investors to the region, creating inclusive economic growth and jobs for all citizens.

Visitor expenditure has contributed significantly to the local economy; with £82 spend per head in 2016, up by a third on the figure of £61 recorded in 2013. Events contributing to Birmingham’s upsurge in tourists and visitor spend last year, included: Edgbaston Stadium’s cricket fixtures (£17.7m); the Birmingham and Solihull Jazz and Blues Festival (£6.2m); the Conservative Party Conference (£18.4m) and the Frankfurt Christmas Market – which generated the highest amount of spend on record, at £400m.

On the flip side, data from Centre for Cities’ annual report, Cities Outlook 2017, has Birmingham featuring frequently amongst the 10 lowest performing cities, across several categories.

READ: Report says EU trade vital, but Birmingham lags in export league.

As reported by Chamberlain Files yesterday, Cities Outlook shows Birmingham (which for the purposes of this report includes the four Black Country boroughs and Solihull as a ‘Primary Urban Area’) is the city with the highest percentage of residents with no formal qualifications (16.5% of working age population in 2015).

Likewise with the number of patent applications published, Birmingham is again in the list of the bottom ten cities, with just 8.2% of applications per 100,000 residents (but Coventry is second, reflecting its economic strengths in the automotive supply chain and serious gaming).

Birmingham is also in a list of cities which is below the national average in terms of both productivity and exports per job.

Steve Hollis, chair of the Greater Birmingham and Solihull LEP, highlighted the issues of skills and productivity in a “looks ahead for 2017” message yesterday:

Our focus in 2017 is on delivering these ambitious plans [to be a top global city region by 2030] and making good on the promises we have made. In particular, we must address our long-standing challenges with productivity and skills. This year will see the introduction of the Apprenticeship Levy and we intend to work with businesses to make the most of the opportunities of this key development to improve skills levels.

But the booming news is back when looking at the growth of private sector jobs, with Birmingham coming sixth in the list of 62 with a 4.3% rise in net private sector jobs growth in 2014-2015, an increase of 32,100.

Whilst some recent reports suggest ‘we’ve never had it so good’ and things are certainly swinging in our favour, with positive headlines around Midlands Engine, HS2 (which passed Third Reading in the Lords yesterday), global firm re-locations and major city centre regeneration, to name a few, the emerging new global order has the potential to bring us down to earth.

Birmingham might well be booming, but our new ‘regional order’ in the form of our soon-to-be elected Mayor has their work cut out to ensure those cranes keep on churning, the office space and fancy apartments become occupied and the world continues to visit in record numbers.

Perhaps even more importantly, the new Mayor along with local councils and LEPs has the familiar challenge of tackling an education and skills crisis, improving productivity and keeping the region moving.

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