How Birmingham businesses are managing risk in 2025
Rather than taking a reactive approach, savvy Birmingham business leaders are proactively maintaining liquidity and securing credit capacity to navigate risks and better position themselves for long-term growth.
The Birmingham region is well-positioned for future success, thanks to its diversified economy and deep pool of talent. According to the City of Birmingham, the metro area is home to more than 18,000 automotive workers and 20,000 skilled metals and machinery professionals. That kind of workforce advantage fuels both innovation and stability across key industries.
Birmingham pros and cons
In addition to Birmingham's growing population, one of its greatest assets is its economic diversity. While its flourishing economy eases the impact of macroeconomic factors including interest rates and inflation, local business leaders still face regional challenges that require thoughtful planning.
Historically recognized for its robust steel and manufacturing industries, Birmingham has also experienced significant expansion in healthcare, finance and logistics. Its strategic location – along with its proximity to the University of Alabama at Birmingham – has bolstered healthcare innovation and talent development. Financial institutions also maintain a strong presence here, reinforcing Birmingham's role as a financial hub in the Southeast.
At the same time, some of the very industries that help drive the region's growth also introduce complexity. Recent tariff policies have disrupted international trade and created ripple effects across supply chains, particularly in manufacturing and logistics.
These challenges underscore the importance of having a comprehensive risk management strategy including operational redundancies and proactive financial action in order to remain quick and nimble in a reactive market.
Five long-term resilience strategies
Consider implementing the following strategies to ensure your business is prepared now for future risks:
1. Engage with your banker: The sooner you share updates with your banker, the quicker they can help you pivot operations. Without a strong relationship, it may take longer to secure financing – potentially leading to missed opportunities. A trusted banking partner can also connect you with strategic partners, advisors and suppliers.
2. Strengthen your balance sheet: Maintain a strong balance sheet by retaining cash reserves, paying down debts or reducing spending. A strong balance sheet provides businesses with a valuable forecasting tool and enables well-informed, timely decisions.
3. Proactively increase credit capacity: The best time to secure credit capacity is before you actually need it. Having credit readily available is key to reacting to crises that may require swift action as well as taking advantage of growth opportunities down the road.
4. Implement operational redundancies: While tariff policies continue to fluctuate, it's important to avoid rash decisions. Instead, create a strong and diverse network of suppliers including domestically. This is especially important to increase redundancies when faced with evolving tariff policies.
5. Build a talent pipeline: In Valley Bank's 2025 State of Business Survey, 42% of business leaders state that finding good employees is a major challenge. Treat recruiting like a sales function — continually building relationships with potential candidates. Tap into Birmingham's skilled labor base and build partnerships with local universities and trade programs.
Take advantage of a strong banking relationship
As you're planning for the second half of 2025 and beyond, business relationships are a key component to long-term success. A strong relationship with a banking partner is not just a financial lifeline, it's a competitive advantage. Valley Bank shares mutual goals with clients – reduce uncertainty on your balance sheet and increase profitability.
Valley's Birmingham Commercial Banking team empowers clients with local industry expertise while utilizing its national strength and capabilities. For example, we leverage our regional partners to augment custom solutions and better position clients for stronger cash flow now and profitability into the future. This differentiation helps drive value for clients especially as we're able to look beyond a transactional level of a business' needs.
Our team recently supported a local transportation company as they continue to expand operations. Valley's Commercial Banking team provided a $20 million credit facility for equipment purchases, ensuring they have the equipment needed to match demand.
Long-term business resiliency isn't built in the moment of need – it's built through planning. Valley Bank's Commercial Banking team is here to understand your business' goals and unique challenges. As we move into the second half of the year, now is an ideal time to reach out to your local team to create or revise your risk management strategy.
As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with nearly $64 billion in assets. Valley operates many convenient branch locations and commercial banking offices across New Jersey, New York, Florida, Alabama, California, and Illinois and is committed to providing the most convenient service, the latest innovations and an experienced and knowledgeable team dedicated to meeting customer needs. To learn more about Valley, go to valley.com.
© 2025 Valley National Bank. Member FDIC. Equal Opportunity Lender. All Rights Reserved.
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