State of the Region 2012: Growth planned despite economic fears
YORKSHIRE business leaders are set to embark on expansion plans in 2012 despite their confidence being shaken by economic conditions which they predict are set to get worse.
And despite fears of issues in the eurozone continuing to affect performance, many businesses are looking to forge ahead and target new markets and clients as well as make acquisitions over 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 leaders.
The survey, compliled with support from lead sponsor DLA Piper, and supported by PwC and the CBI, paints a comprehensive picture of business sentiment across TheBusinessDesk.com’s heartlands of Yorkshire, the North West and West Midlands.
It is the third year the survey has been run by TheBusinessDesk.com and all this week we will be assessing the results.
In Yorkshire, 58% of respondents expect their business’s turnover to grow over the next 12 months, almost half (47%) expect to maintain the number of staff employed, while 30% highlighted acquisitions as the most likely transactional activity they will be involved in.
Despite many commentators anticipating that international markets offer the best opportunities for growth, 71% of respondents see regional and national markets as better suited to their needs.
Demand for goods and services is seen as the biggest challenge faced by businesses, but those surveyed said the impact of public spending cuts will be the biggest challenge for the Yorkshire region going forward.
More than two-thirds (69%) said the introduction of enterprise zones are good for the overall growth of the region but 60% said it was too early to tell if local enterprise partnerships were having a positive impact.
Almost half (47%) said they were less confident about the state of the UK economy than 12 months ago and the same percentage believe economic conditions will get worse.
Access to finance is the issue that needs to be addressed most urgently to drive further growth, although 60% of respondents expect bank lending for businesses to remain the same.
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Sarah Day, managing partner at DLA Piper in Leeds, said the findings showed that the ongoing economic strain appeared to be taking its toll on Yorkshire businesses.
Ms Day said: “The general pessimism is enhanced by the concern that we have not yet begun to feel the effects of the austerity policies implemented by the Government whilst any benefits from the Government’s planned credit easing scheme are unlikely to filter out until 2013.
“This leads to a nervousness even amongst those companies continuing to do well, of which there are a good number, as to what the year will bring.”
However, Ms Day said that Yorkshire, as one of the largest economies in the UK, had the foundations from which to build growth and confidence and said plans for turnover growth growth from the majority of businesses surveyed was a positive sign.
“This demonstrates the determination that continues to resonate throughout our business community and the appetite that exists to make the most of the opportunities that adversity can often bring.”
Steve Denison, PwC’s Northern Chairman in Leeds, said: “When it comes to forecasting turnover for the year ahead, there is a noticeable air of confidence in the poll findings and this is good to find at the heart of the region’s entrepreneurial business community.
“It is particularly encouraging to see that a significant number of businesses are expecting to take on staff in the year ahead, which would help to improve overall business confidence in the region.”
Comment: Yorkshire can defy the gloom
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