Insider Media Limited

Inward investment in Birmingham could be hindered as a result of rioting in the city, according to the Institute of Directors' West Midlands chairman. John Rider said two days of looting and violence across the city has made it "more difficult" to attract investors. His warning came as the Birmingham Chamber of Commerce Group estimated the riots have so far cost Birmingham about £7m.

The city's retail and leisure industry could have been hit by up to £2.5m a day as a result of the rioting on the city’s streets since the weekend, said the chamber.

The chamber's chief executive Jerry Blackett said: "While there is much guesswork involved, our best estimate is that the riots could have so far cost Birmingham a total of about £7m.

"But this does not take account of the cost to businesses like banks and other institutions who have suffered by having to send staff home with the resultant loss in productivity. The total Birmingham economic output creates £20bn a year, which equates to over £55m a day."

"Clearly, the rioting will have had an impact on the city economically and for some businesses the losses could be the difference between profit and loss."

He told Insider the next few days would be "extremely testing" for businesses in the region.

John Rider agreed that the city's businesses would undoubtedly suffer as a result of the violence.

He said: "Who will want to invest in Birmingham now? I am convinced the region still has a lot to offer inward investors but this has made attracting them more difficult.

"We should not kid ourselves into thinking the regional economy is improving – it isn't."

Over the last few days, cities including Birmingham, Wolverhampton, Cannock and West Bromwich have become grounds for rioters with shops looted and cars set on fire.

Birmingham's Bullring shopping centre confirmed Savers and Yoshe Nail Bar were damaged in the riots. Celebrity chef Jamie Oliver's restaurant Jamie's Italian, which is located in the shopping centre, also came under attack from the protesters.

A McDonalds, Marks & Spencer and an Armani store were reported to have been targeted by looters in the city.

The Bullring confirmed it would now draft in additional security measures around the site.

Blackett said: "This will clearly have a damaging effect on businesses as they also struggle to cope with the most serious economic downturn for years and the next few days will be extremely testing.

"Birmingham and other cities in the UK will quickly want to repair the damage to infrastructure and image and our business community will unite in its determination to help that happen."

He said reports had suggested that business, retail and entertainment areas of the city have been extremely quiet and many forced to close early over the last few days.

Two days of rioting in Birmingham were accompanied by similar scenes across the West Midlands.

Rider said imminent solutions were required to ease the social tension.

"Long term, HS2 London to Birmingham high speed rail, the Birmingham airport runway extension and enterprise zones may lead a fight back," he said.

"But what we need are jobs now - and there aren’t anywhere near enough."

Blackett added: "We hope that the situation will begin to calm and that Birmingham will quickly return to being the friendly, open-for-business city it has always been. But there will undoubtedly be a knock-on impact on business."