State of the Region 2012: Businesses fear eurozone problems

TWO-thirds of Yorkshire business leaders believe ongoing issues in the eurozone will affect their organisations over the next 12 months.

TheBusinessDesk.com’s State of the Region survey 2012 also reveals that the majority of respondents are looking to regional and national markets to drive their businesses forward, rather than international ones.

The survey, completed by hundreds of business people, is supported by lead sponsor DLA Piper and PwC and the CBI and paints a comprehensive picture of business sentiment across TheBusinessDesk.com’s heartlands of Yorkshire, the North West and West Midlands.

Coupled with looking to regional and national markets for growth, one of the reasons being uncertainty in the Eurozone, 72% of respondents in Yorkshire said targeting new markets and clients was their key business objective.

More than half (58%) expect their business’ turnover to grow over the next 12 months – a similar pciture to our 2010 survey – and 37% expect to grow staff numbers over the same period compared to just 16% who expect to reduce employee numbers.

A slight majority (52%) anticipate public sector spending cuts will have a direct impact on their business, although this figure was 16% down on last year’s survey.

Almost two-thirds (63%) believe their organisations have adequate access to finance to cope with economic pressures.

Jonathan Procter, head of corporate at DLA Piper in Leeds, said Yorkshire business leaders were in agreement with the chief economist of the Bank of England that the Eurozone crisis was “the single biggest threat to UK recovery”.

Mr Procter said: “It seems that business leaders agree on the severity of the threat. However, the good news is that in spite of this, businesses are still looking at ways to grow. Over half of respondents stated that targeting new clients or markets would be their priority next year.

“Although the majority of respondents saw either regional (38%) or national (33%) markets as the most promising targets, the number of businesses that see international markets as key areas of opportunity has risen from 19% in 2010 to 25% in 2011.

“These figures are aligned with what we’ve experienced over the past year, where clients are increasingly seeking cross-border advice in terms of both acquisitions/disposals and exports.”

Arif Ahmad, private business partner at PwC in Leeds, said: “Private companies in Yorkshire are telling us that they are concerned about how the Eurozone crisis might impact on their business and while the majority see regional and national markets as most important to them, their interest in new markets is increasing. This is a trend that is likely to continue during 2012.”

The eurozone – what you said:

“Many clients operate in the eurozone, and any uncertainty has (eventually) knock on effects.

“In the main it is similar to the cuts, customers believe all the media reports, and some customers who are not directly affected can become nervous due to the media’s reporting of cuts and the consequences of the collapsing eurozone.”

“It hangs like a pall over the world – it is inevitable that it has an impact in the current climate, the natural inclination is to sit on your hands and see how it pans out. There will be bloodletting – might as well get it out of the way.”

“It will affect everyone. We act for property companies backed by FTSE listed companies and multinational financial institutions. A lack of confidence kills investment.”

Tomorrow: The region

Comment: Yorkshire can defy the gloom