Research found that manufacturers have been particularly exposed to rising energy, transport, insurance and raw material costs.

The survey of 698 businesses was carried out jointly by Greater Birmingham Chambers of Commerce, Coventry & Warwickshire Chamber of Commerce, Black Country Chamber of Commerce and East Midlands Chamber.

It found 80 per cent of respondents had experienced an increase in business costs during the previous three months because of the situation in Iran and associated disruption to international trade routes.

Almost all manufacturers surveyed (95 per cent) reported higher costs, compared with 75 per cent of service-sector businesses.

Nearly two-thirds of manufacturers (64 per cent) experienced moderate or significant increases, while five per cent said the rises were severe enough to threaten the viability of their business.

The conflict has also affected the region’s exporters. Of the 187 exporting businesses that responded, 12 per cent said they had paused activity or withdrawn from specific overseas markets.

One respondent said orders from the United Arab Emirates, described as one of its largest export markets, had been cancelled indefinitely.

Another business said it had withdrawn from the Middle East market, closed its UAE showroom and made its sales representative redundant.

The Chambers’ report also highlights the wider impact of geopolitical uncertainty on business confidence and decision-making.

More than a quarter of all respondents (26 per cent) said the situation had influenced investment or capital spending.

Supply-chain disruption was particularly widespread among industrial firms. Almost half of manufacturers (47 per cent) experienced delays to incoming materials or supplies, while 38 per cent reported reduced availability of essential inputs.

Nearly a quarter of manufacturers (22 per cent) experienced delays to outgoing shipments, while 17 per cent suffered customer order cancellations.

When asked what would help them manage continued geopolitical disruption, firms identified energy cost support or stability as the leading priority (50 per cent).

It was selected by 50 per cent of manufacturers and 41 per cent of service-sector firms.

Clearer government contingency planning was the second most common request, identified by 47 per cent of manufacturers and 36 per cent of service businesses.

Companies also called for supply-chain and logistics assistance, support with export insurance and trade finance, and improved access to alternative suppliers and international markets.

The survey was conducted between 11 May and 8 June 2026. Almost half of respondents were microbusinesses employing fewer than 10 people, while manufacturing, professional services, construction, hospitality, retail and the public and voluntary sectors were among the industries represented.

The four Chambers are calling for the Government to recognise the regional impact of continuing geopolitical disruption and provide businesses with greater certainty over energy, trade and supply-chain policy.

Corin Crane, chief executive of Coventry & Warwickshire Chamber of Commerce, said: “The Iran conflict has caused a series of direct and indirect impacts on businesses across the region. 

“At a time when firms in both the manufacturing and services sectors were hoping for a stable footing from which to grow, the conflict has led to rising fuel prices which has a wider impact on inflation generally and on the direction of interest rates. 

“All of that has a knock-on effect when it comes to confidence too.” 

Raj Kandola, deputy chief executive of Greater Birmingham Chambers of Commerce, said: “Businesses across the Midlands continue to demonstrate resilience in the face of significant global uncertainty, but our research shows that this resilience is being tested. 

“Rising operating costs, supply chain pressures and uncertainty around future investment are all consequences of international events that are increasingly being felt at a local level.

“The findings reinforce the importance of creating a stable environment in which businesses can invest with confidence. 

“The Prime Minister has rightly recognised the importance of reducing energy costs for consumers, but we need to see a similar focus on improving energy affordability and stability for businesses. 

“Alongside clearer government contingency planning, measures that help firms manage energy costs will be vital in helping businesses withstand future shocks, protect jobs and continue driving economic growth across the region.”

Sarah Moorhouse, chief executive of the Black Country Chamber, said: “This important research makes it clear just how deeply the conflict in the Middle East is being felt by Black Country firms and those across the wider Midlands.

“The fact that 80 per cent of businesses are seeing increased costs – including 64 per cent of manufacturers – just underlines the scale of the challenge the ongoing conflict is posing.

“The disruption to trade routes and impact on investment are being felt on factory floors and in workplaces across out region.  

“There is a clear message to the new government that it must do more to plan ahead for such crises and develop an energy strategy which delivers the stability our businesses need to plan ahead with real confidence.

“It is critical that the voice of business is heard and we will continue to bang the drum for support for our members for as long as the crisis continues.”

East Midlands Chamber chief executive Scott Knowles said: “High costs and uncertainty are two things that challenge business growth, affect confidence and ultimately investment, yet both jump out of the page as red flags in these survey findings – that should be a concern to policymakers.
 
“The results of this research lay bare the extent of damage this long running conflict, and others, has had on firms – holding back investment, holding back growth.
 
“For eight out of ten firms surveyed to have reported higher costs as a result of the Middle East conflict - at a time when we know the cost of doing business was already sky high – should concern policymakers.
 
“For investment intention to have stalled for many firms; for price pressure to have increased - these should be concerns for policymakers too and prompt action.
 
“The case for support is clear – the respondents in this survey are calling for greater help with energy costs and better contingency planning. I would urge policymakers to prioritise delivering in the areas firms have highlighted so growth is not hindered.”

Read the full report: https://issuu.com/greaterbirminghamchamberofcommerce/docs/us_iran_war_draft_report_final