With both clubs on a five-match losing streak something had to give and sadly for disillusioned Black Cats fans, it was City who emerged victors in a dour struggle that leaves Mick McCarthy's side seeking a miracle even at this stage of the season to avoid an immediate return to the Championship.
McCarthy blasted his players after last week's home defeat by Aston Villa but to no avail as a very ordinary Birmingham side still had too much guile and craft to snap up the three points.
All three second-half substitutes played a part in the all-important goal in the 67th minute, Jemaine Pennant crossing from the right for Walter Pandiani to power in a header that was beaten out by goalkeeper Ben Alnwick, only for Julian Gray to sweep the loose ball into the empty net.
It was rough justice for Alnwick, one of the few successes in a Sunderland side in danger of not even reaching the lowest ever points tally of 19 they set themselves when relegated three seasons ago.
Sunderland were without injured central defender Alan Stubbs, Danny Collins taking over, but Julio Arca's continued absence because of a broken toe was a big blow for manager McCarthy.
Blues boss Steve Bruce dropped goalkeeper Maik Taylor after a run of poor form, recalling Nico Vaesen, but was able to bring back Mario Melchiot, David Dunn and Damien Johnson after injury.
Malchiot proved a tower of strength in defence and while Jonathan Stead strove manfully in an attempt to score his first goal for the Black Cats, he lacked support to make a great deal of impact.
Stead produced a fine save from Vaesen but the visitors missed the best chance to break the deadlock as early as the 15th minute when Neil Kilkenny was sent clear from Matthew Upson's long punt forward.
But he allowed Gary Breen to get in the all-important challenge, but there were further scares for the home side when Alnwick collided with Breen and the teenage keeper then flapped nervously at a cross-cum-shot from Dunn.
Stead cut in dangerously from the left but Muzzy Izzet forced the ball behind for a corner and Christian Bassila fired wide as Sunderland huffed and puffed without any conviction.
McCarthy brought on Liam Lawrence at the start of the second half for the disappointing Andy Welsh and Chris Brown for the out-of-sorts Anthony Le Tallec, but the changes introduced by his opposite number proved more decisive.
Pandiani's pace and power was matched by the fleet-footed Pennant, yet it was Gray who emerged the hero with his first goal of the season.
Brown almost salvaged a point for the Black Cats, Vaesen diving to his left to turn a crisp drive behind for a corner, but Sunderland are badly in need of an injection of pace and ideas from some where if they are to get out of this mess.
They again played second fiddle to a side also scrapping for Premiership survival, but with virtually no cash available when the transfer window reopens in January, the staunch following of supporters face a bleak winter.
Man of the Match: Mario Melchiot - Returning from injury, the Holland international showed his class to shore up the Blues backline.