State of the Region: Regional markets still key despite challenges

THE key challenges for 2011 highlighted by Yorkshire business leaders in TheBusinessDesk.com’s State of the Region Survey are pressure on pricing, increased competition and cuts to public spending.

The major annual survey, sponsored by law firm DLA Piper, also reveals that almost two thirds of respondents (64%) expect to grow their business while 41% plan to take on more staff.

This is good news for the region, which is facing a tough year for jobs losses in the public sector as a result of the Government’s austerity cuts.

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

Unsurprisingly, with many businesses supplying publicly funded bodies such as Yorkshire Forward – a high profile casualty of the cuts – reduced public spending is seen by 63% of respondents as likely to have a direct impact on their businesses.

Pressure on pricing and increased competition were also ranked high on the list of business’ concerns.

Exactly half of business people think regional and local markets offer the best opportunities for their businesses going forward, 34% believe national markets will offer the best opportunities, while the remainder (16%) will look internationally.

To our question on what employee issues will be faced over the next 12 months, salary and pay and recruitment of new staff were the top two answers.

Targeting new UK markets, developing new products and services for existing markets and upskilling staff are the main business objectives for respondents.

Guy Lamb, location head for employment at DLA Piper in Leeds, said: “Many organisations are entering 2011 with an attitude of cautious optimism. The prospect of business growth and recruitment are positive signs.

“However, that is not to say the next twelve months will be plain sailing. As the results of the survey indicate, it is also likely we will see an increase in industrial action and employee unrest.

“As staff see companies riding the storm and returning to a semblance of stability, they will be less willing to accept pay freezes or pay cuts. Meanwhile, employees will be anxious about the impact of council tax and VAT rises on their personal finances, which may aggravate concerns they have over their salaries. “
 
Richard May, location head for commercial at DLA Piper in Sheffield, added: “Whilst our region offers great opportunities for growth, it is essential local businesses look beyond Yorkshire to new markets.

“At DLA Piper we work with many growing businesses, particularly on M&A activity, and getting the best deal for the right business often means developing business opportunities further afield than in the immediate market.

“Equally, our region also makes a great case for bringing business back to Yorkshire. We can boast a number of benefits over other parts of the UK including lower employment and real estate costs, allowing major city regions like Sheffield and Leeds to provide more cost-effective business services than some other regions.” 

State of the Region: Your views

Public spending cuts and the impact on your business

“Our private sector clients have contracts with the public sector and public sector cuts are bound to have a knock on effect across the economy as a whole.”

“As a recruitment business we are impacted by factors impacting our clients and any business impacted by the spending cuts will have a knock on effect to the recruitment market. We will also see an influx of public sector candidates coming on to the market.”

“We have worked for many public sector bodies over the past 10 years and these markets are contracting, so we’re looking for ways in which we could apply our expertise to other areas, which we may have dabbled in before, but now need to fully exploit.”

“The timber that I produce feeds the construction industry amongst others. Public spending drops and public building projects stop. Public sector redundancies and people have less money to spend. Increased crime as a result of unemployment.”

“The cuts in public spending will inevitably lead to large numbers of job losses. This will put further surplus office space into an already challenging market.”

More on State of the Region Survey:

– Austerity measures won’t stop growth

Tomorrow:

– About your region

Do you agree with the results? Please leave your comments below.