State of the Region Survey: Bosses upbeat on recovery

NORTH West business leaders are in upbeat mood and the majority expect to see their companies grow this year.

That’s according to the results of our first-ever State of the Region Survey, which attracted hundreds of responses from our subscriber base.

Respondees – including many entrepreneurs, financiers and professionals – overwhelmingly believe the North West is a good place to do business.

The survey, supported by headline sponsor DLA Piper , and by associate sponsors BDO and Yorkshire Bank, found that the key drivers for economic recovery will be increased bank lending and a change in government.

The major threats to recovery were cash flow issues and limited sales opportunities, while the North and Western Europe were seen as the key markets from a domestic and international perspective.
.
The survey found that 55% of respondents are more confident about the region’s economy than 12 months ago, while 15% are less confident. The remaining 30% are feeling the same about prospects now as they were at the start of 2009.

There was a split over what would drive economic recovery most this year, with 32% believing increased bank lending would be the key factor. The same proportion, 32%, believe this would be a change in government.

The third most popular factor was increased consumer confidence, which was favoured by 11% of respondees.

Technology was the sector most likely to thrive this year, while the public sector will have the hardest time, the survey found.

The region’s credentials as a good place to do business were given a seal of approval as 91% of respondents agreed that it was. The key problem to address to make it even better was addressing transport infrastructure issues.

David Gray, Manchester office managing partner at DLA Piper said the feedback from the survey was “very encouraging”, but believes a truer picture of how the North West will fare will not be seen until after the general election.

“There are a lot of people out there, including the key players at the banks, playing a wait and see game. In the circumstances, I don’t think it’s reasonable to see any material change in our local economy until 2011.”

He feels the recovery will happen more slowly because businesses are adopting a more cautious approach to expansion and borrowing, and thinks there may be some challenges ahead as more businesses fail.

“I still think there’s a sting in the tail and the banks will be forced to come out from under the influential of political pressure and take action to recover what is owed to them from ailing businesses. This will undoubtedly have a domino effect on the business world starting at the top of the supply chain and working its way down.

“On the plus side it’s fair to assume that the purse strings will be loosened and increased liquidity in the NW will enable business to get back into the forward gears.

“The cost savings of 2009 have left businesses leaner and meaner with a good platform to exploit the positivity that the survey results have shown.

“The North West in general and Manchester in particular, still have a lot going for them and I fully expect the region’s natural optimism to produce positive results in 2011.”