The bragging rights belong to the Brummies in the latest round of a never-ending fight to be second city of the UK, as Manchester slipped two places and Birmingham rose seven in the Cushman & Wakefield study.
Manchester fell from 14th to 16th in the rankings, based on 500 interviews with senior executives in leading European companies. Birmingham had occupied 21st in 2008 but took 14th this year. Leeds was 24th in the list of 34 cities studied, up from 28th last time. London, Paris and Frankfurt occupied the top three places in that order.
Colin Sinclair, chief executive of MIDAS, Manchester's inward investment agency, added: "We are obviously disappointed to see Manchester drop a little, but it is important to take it in the context of the hard facts and statistics behind Manchester City Region's phenomenal success over the past ten years. The report still has Manchester performing incredibly well against other leading European cities, many of them capital cities, and in fact sees us rise up the table in important indicators like familiarity as a key business location and cost of staff both of which are vital to the city region's success."
Birmingham scored well on levels of qualified staff, access to markets and cost of premises.
However, when asked about expansion plans, seven of the 500 companies said they expected to have a Manchester base in the next five years, compared to only three in Birmingham.
Tony Bray, partner and head of Cushman & Wakefield Manchester, said: "Over the last few years Manchester has enjoyed an enviable position as the UK's second city according to the ECM and although it has fallen behind Birmingham this year, we are encouraged by the fact that the report states that outside of London, Manchester is still the preferred location for more European companies to expand within the UK. Given the current economic climate, it is more important than ever that we do our utmost to attract investment and this report demonstrates Manchester's continued growing status as a leading European business destination by the fact that it has improved familiarity as a business location. Manchester is a vibrant and diverse city that is undergoing rapid change and is still an exciting place to do business."
The 500 interviews were carried out by independent consultancy TNS BMRB.
The full report can be viewed at the C&W European Cities Monitor website.