State of the Region Survey: confidence up across the North

BUSINESS leaders across North West and Yorkshire are united in their belief that confidence in the economy is up, bank lending will increase this year and that companies will experience growth over the next 12 months.

And in a boost for their respective markets, an overwhelming number of those taking part in TheBusinessDesk.com’s first State of the Region Survey said their respective regional markets were good places to do business.

Hundreds of subscribers took part in the online survey, kindly supported by headline sponsor, law firm DLA Piper and associate sponsors BDO, Financial Leeds and Yorkshire Bank.

Despite agreeing on the majority of issues raised through the survey, respondents held differing views on what they believe will drive economic recovery the most. In the North West bosses were split on what would drive growth – favouring a change in government and increased bank lending in equal measure, while in Yorkshire consumer confidence is key.

Although easier access to politicians and decision makers and sharing ideas among business leaders were the top answers across both surveys regarding what are the best things that could be done to improve the business cultures of their respective regions, those in the North West also want to see more opportunities to learn from outside the region, while in Yorkshire joint lobbying by business leaders is seen as a key issue.

Business sentiment across both regions is united on issues including confidence, with more than half in both regions feeling more confident about the economy than they did 12 months ago, while 61% in Yorkshire and 60% in the North West think the market will pick up in 2011.

David Gray, pictured, managing partner of DLA Piper’s Manchester office, said: “Although the Pennines may act as a physical boundary between the North West and Yorkshire, the consistent message that has come out of companies in both regions is that they see the value in their regional location and have taken a commercially pragmatic approach to the recession and the expectation of recovery during 2010 should give business leaders a great deal of confidence moving forward this year.
 
“However, there are clearly still issues that need to be addressed on both sides of the Pennines. Arguably the northern regions have placed too many eggs in one basket and remain a little too focused on local trade markets. If one of the biggest barriers to growth in 2010 is perceived as being limited sales opportunities, then the solution must be for businesses in the North to continue to increase their levels of internationalisation, both to provide new markets to aid an expansion of their sales base, and also to encourage more inward investment from the emerging economies, particularly in Asia and the Far East.”

He added: “Both regions face challenges to improve their transport and infrastructure, although the North West has the edge over Yorkshire. In spite of these issues the North still has excellent access to European and US markets through our growing international airports and ports.

“The entrepreneurial spirit for which this region is rightly famed, will go a long to realising the anticipated recovery.”

More than half of respondents across both regions expect bank lending to increase in 2010, with quarter three seen as the likely date for this across both regions. Technology will be the biggest growth area in both regions, but the professional services sector in the North West and financial services in Yorkshire are also seen as key growth areas.

In the North West, 67% think their businesses will grow in terms of revenue, profit and staff, while 63% expect this to be the case in Yorkshire, with organic growth expecting to lead the way. Limited sales opportunities, access to finance and cash flow are the three main challenges across the two regions. Again, both regions are in concert when it comes to alternative ways of raising finance, saying they hadn’t considered taking the step.

Regional and national markets are seen as the places for the best growth opportunities, but Western Europe, Asia and the USA offer positive entry points. More than 90% of respondents across both the surveys see their respective regions as good places to do business, but are concerned that transport and a lack of inward investment are holding their respective regions back. A majority also feel a change in government will also make a difference to their respective economies.