State of the Region: Austerity measures won’t stop growth

BUSINESS leaders in Yorkshire are planning to grow their organisations and staff numbers and believe the region is still a good place to do business despite seeing the impact of public sector cuts as the biggest challenge facing them in 2011.

And despite fears of a lack of understanding about the introduction of Local Enterprise Partnerships in Yorkshire, bank lending remaining tight and economic conditions remaining fragile, many businesses are confident about their prospects for the next 12 months.

These are some of the key findings in TheBusinessDesk.com’s State of the Region Survey, which has been completed by hundreds of business people.

The survey, supported by leading law firm DLA Piper, paints a comprehensive picture of business sentiment across Yorkshire, the North West and West Midlands.

The Yorkshire survey found that although 63% of respondents anticipate cuts to public spending will have a direct impact on their businesses, 33% are more confident about the UK economy and 48% feel the same way as they did about it 12 months ago. The remainder (19%) are less confident than they were this time last year.

Almost half (43%) think the Coalition Government will have a positive impact on the economy, 12% think it will have a negative impact and 45% believe it is too early to tell.

Click here to download the full report on the State of the Region Survey.

Just over half (51%) said they expect economic conditions in 2011 to stay the same, while 28% expect an economic upturn and 21% a downturn.

Almost two-thirds (64%) expect their businesses to grow over the next 12 months, 11% think they will contract and the remainder expect their organisations to remain the same size, while regional and local markets were seen by half of respondents as providing the best opportunities for growth.

Although recruitment of new staff is viewed as an issue which will affect businesses going forward, 41% expect to grow staff numbers over the next 12 months.

Transport and infrastructure are the most important issues that need to be addressed to drive growth in Yorkshire.

More than half of respondents (64%) think there is very little or no understanding on the introduction of LEPs, the vehicles that are replacing regional development agencies.

Only 5% said they had a “very clear” understanding of new regional funding initiatives, such as the £1.4bn Regional Growth Fund.

The majority of respondents (56%) said the Government’s public spending cuts are necessary and will stabilise the economy.

Commenting on the findings, Neil McLean, office managing partner for DLA Piper in Leeds, said: “The results of the survey are a nod to the entrepreneurial spirit of the Yorkshire region. There is no doubt that we are operating within a challenging climate, but buisnesses do not see 2011 as a year for standing still.

“Instead, firms are scrutinising their strategies, their strengths and weaknesses more than ever before and as a result they are taking innovative steps to create a more robust and sustainable business model to take them forward in the future.”‬

Stephen Sly, office managing partner for DLA Piper in Sheffield, added: “The Leeds and Sheffield City Regions offer a strong and dynamic environment in which businesses can flourish and which have some exceptional commercial talent which must be accessed if the LEPs are to succeed.

“There exists a real opportunity for business to take the initiative in shaping how the public sector delivers the right support to facilitate jobs growth in the private sector. The fact that 64% of respondents feel there is little or no understanding of LEPs is a real concern.

“If we are to compete effectively both with the South East and on the international stage then this has to be addressed immediately as well as ensuring that these leading City Regions operate collaboratively with complementary strategies rather than locking horns in a direct competition which only dilutes their aggregate offering.”

Tomorrow: About your business

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