Birmingham's Economic Stagnation: Residents Feel No Better Off Than 2013
New research has revealed a concerning picture of economic stagnation in Birmingham, with the city ranking among the UK's worst performers for disposable household income. According to the latest Cities Outlook 2026 report from the Centre for Cities, Birmingham's average gross disposable household income per person stands at just £15,620, placing it sixth lowest among the UK's 63 largest towns and cities.
Thirteen Years of Economic Disappointment
Dr Steve McCabe, associate professor at Birmingham City University, has analysed the report's findings and delivered a stark assessment of the city's economic trajectory. "In real terms, once you allow for inflation, the average citizen in Birmingham will feel no better off than they did in 2013," he stated. "That was when we were still reflecting on the glow of the London Olympics. It's hard to believe this improves the prospects of hard-pressed Brummies."
The data reveals that Birmingham has consistently failed to keep pace with national economic improvements over the past thirteen years. Despite what Dr McCabe described as "the undoubted efforts of the City Council and mayors for the West Midlands," disposable income in the city has fallen relative to the national average since 2013.
The Core Economic Challenges
The Centre for Cities report identifies three key areas where successful cities typically outperform national averages:
- Share of jobs in knowledge-intensive business services
- Productivity levels
- Workplace wages
Dr McCabe confirmed that Birmingham continues to struggle across all three metrics. He traced part of the problem back to the city's incomplete recovery from the manufacturing decline of the 1980s, noting that many current employment opportunities, particularly for younger residents, involve low-paid, insecure work in sectors like food delivery and online retail logistics.
The Human Impact of Economic Stagnation
The statistics paint a worrying picture of household finances across the city:
- Almost half of Birmingham households rank among the most income-deprived in the country
- More than 90% of households classed as most income-deprived in 2010 remained in that category five years later
- The average Birmingham resident had disposable income of no more than £17,500 in 2023 when measured in 2025 prices
"For so many people, often on zero-hours contracts, it's hard to say their standard of living has increased at all in the last 13 years," Dr McCabe observed. He noted that sharp increases in accommodation and food costs have absorbed any gains from higher hourly pay rates, leaving many households financially squeezed.
Educational and Skills Barriers to Improvement
Dr McCabe highlighted ongoing challenges around skills development and educational attainment in parts of Birmingham, warning that these factors make rapid economic improvement unlikely. He expressed little confidence that conditions would significantly improve before the next general election expected in 2029, or even by the time the next Cities Outlook report is published.
Political Consequences of Economic Pressure
The persistent economic challenges are beginning to manifest in political disillusionment, according to Dr McCabe's analysis. Polling in Birmingham shows growing scepticism towards mainstream political parties, including Labour, which took power in July 2024 promising improvements to living standards.
"People who feel they are getting poorer can easily be seduced by those offering radical solutions," Dr McCabe warned. He predicted that upcoming local elections could result in a fragmented council composed of independents and Reform UK councillors, creating what he described as "a political hotchpotch [that] risks creating inertia."
The Cities Outlook 2026 figures, based on the latest available data from 2023, highlight the significant challenge facing Birmingham as it seeks to translate any economic growth into tangible improvements in living standards for its residents. As Dr McCabe concluded: "For all our sakes, I sincerely hope I'm proved wrong."
