Middlesbrough manager Tony Mowbray admitted his side's failure to kill off games has undermined their play-off push after seeing them slump to yet another defeat.
Boro missed some good chances and were caught cold by a late Birmingham strike from Nikola Zigic as they lost 1-0 at the Riverside.
It was a third successive defeat and sixth in eight matches in the npower Championship and, although they remain ninth in the table, Boro are now five points adrift of the top six with just eight games left.
"We are making it difficult for ourselves," said Mowbray. "We understand we need to win games to give ourselves a chance and that now we have one less game to do that.
"But it was a fine margin game. It could have gone either way but unfortunately it is another one that fell the wrong side of the line for us.
"We asked questions of them and had our chances to score but we never took them.We have maybe missed a few chances to kill games off in recent weeks but that is where we are as a team."
Birmingham boss Lee Clark was delighted with a win that clawed his side further away from the relegation zone, but warned against assuming the hard work was done.
"We've still got to be aware of what's going on behind us," he said.
"With the results teams are getting below us, there's more good runs in the bottom half of the table than the top so it's turned on its head.
"If we do things right in the last eight games we'll see where that will take us, but that's two defeats in 14 games now which is pleasing."