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Birmingham Economy 2025: 1.4% Growth and FDI Surge
City-REDI's latest review reveals Birmingham's economic performance, investment trends, and business confidence shifts across Greater Birmingham and the West Midlands.
How we reported this
The annual Birmingham Economic Review is produced by the City Region Economic Development Institute at the University of Birmingham and the Greater Birmingham Chambers of Commerce. Data and commentary were correct at the time of publishing in December 2025.
Inflation, rates and output
UK inflation rose to 4.1 percent in August 2025, the highest in the G7. The Bank of England paused its rate cuts at 4 percent. Greater Birmingham’s economy grew by 1.4 percent in 2023. The West Midlands led Foreign Direct Investment outside London with 130 projects in 2024-25.
Enterprises, confidence and R&D spending
Greater Birmingham & Solihull had 72,620 enterprises in 2024. Regional business confidence declined from 12.9 in the second quarter of 2024 to 7.9 in the second quarter of 2025. West Midlands Gross Domestic Expenditure on Research and Development was £5.5 billion in 2023, equal to 8 percent of the UK total. Over £800 million of new investment was announced in 2025, including £400 million for the Birmingham Knowledge Quarter. The West Midlands Health Technology Innovation Accelerator leveraged a £14.5 million government grant to attract £50 million in co-investment. Greater Birmingham hosts around 180 AI firms, which is 1.8 percent of the UK total, and 59 new AI firms were established in the region in the first 10 months of 2025.
Labor market, visitors and infrastructure
Unemployment at 5.1 percent and economic inactivity at 23.1 percent in Greater Birmingham remain above national averages. Birmingham’s visitor numbers hit 934,000 in 2023. The passing of Ozzy Osbourne in July 2025 brought global attention to Birmingham’s musical heritage. His final concert generated an estimated £33.8 million in gross output, with £27.6 million retained in the West Midlands. The West Midlands’ affordability ratio improved to 6.86, below England’s 7.53, however 116,000 households remain on waiting lists for social housing. The West Midlands has emerged as a national leader in EV charging, with 725 charge points per 100,000 people in 2025, up from 43 in 2019.