Concern about cyber risks adding to business worries.

Confidence among Birmingham businesses is on the rise according to research conducted by business insurance specialist, QBE. 63% of businesses surveyed plan to recruit additional skilled staff in the next 12 months, although 35% are concerned about the availability of this talent.

The research, conducted among 400 businesses across the UK in June 2014, found that firms in Birmingham and the surrounds are feeling more positive now than six months ago and concerns about consumer and business confidence are diminishing. An overwhelming 77% of businesses in the region plan to invest in more than one operational area in the next twelve months, including in new or additional facilities, machinery or production processes. This is above the national average of 74%.

Unease about interest rates, however, has grown substantially over the last six months with nearly one in five businesses (19%) nationally citing the outlook for interest rates as the single most concerning aspect of the economy.

In line with businesses throughout the UK, 30% of West Midland firms feel that the overall level of risk they are exposed to has increased in the last six months with intensifying competitor activity, market pricing risk and unfavourable trends in input prices named as key areas where business risk has increased in recent months.

In addition, 56% of the businesses surveyed felt they had gained exposure to one or more completely new areas of risk in the last two years. Concerns about cyber crime have grown substantially with 21% of businesses in the region feeling more exposed now than they were just six months ago. This is undoubtedly exacerbated by high profile cases such as the Heartbleed virus.

The research also focussed on how companies were managing the increasing levels of risk they felt they were exposed to. 43% of businesses in Birmingham and the West Midlands plan to invest in their risk management systems and practices over the next 12 months with the implementation of mechanisms to track the progress of risk improvements and the demonstration of the return on investment of such interventions cited as the primary areas for improvement.

Tim Clarke, Regional Manager in QBE’s Birmingham office commented “Our research has shown that business confidence in Birmingham and the surrounds is improving and that local firms are looking towards expansion and growth. Local businesses do however feel they are facing increased levels of risk, including many which they are encountering for the first time, such as cyber. In our experience as a business insurance specialist, we know that a robust and rigorous approach to risk management is essential.

“It is therefore reassuring to see from the research that a large proportion of businesses plan to invest in their risk management practices. Insurance companies can help firms in this respect by providing best practice advice and assistance in evaluating the effectiveness of their existing programme. I would urge all local businesses to work with their insurers to obtain advice and an assessment of their approach to risk management in order to reap the operational and financial benefits that well managed risks can deliver.”