Cautious optimism for 2013 prospects

THE North West has reasons to be cheerful as 2013 begins, but prospects for the year will continue to be dominated by national and international economic factors.

Innovation, a willingness to embrace international trade and resilience have become essentials for businesses in this region, and such facets will continue to be required in an era of weak business and consumer confidence.

While concerns over the US ‘Fiscal Cliff’ may have abated, the uneasy economic peace in the euro zone is still an issue.

Closer to home there are reasons for cautious optimism in the manufacturing, knowledge and creative and digital sectors in particular, while Manchester Airports Group, continues to drive the region’s economy.

The new enterprise zones are starting to take shape across the region, and despite the tough, and arguable punitive local authority funding settlements, there is strong leadership and strategic vision evident in both Liverpool and Manchester.  

Tony Attard, chairman of business lobbying group IoD in the North West said the recent lifting of the ban on shale gas exploration could boost the region’s economy,  but only if it is done so appropriately.

“Shale gas could bring a lot to the North West economy, but it would need to be regulated. We should expect to see more debate and regulation around this next year, in order to protect people’s interests, or else we risk getting carried away.

“Overall I think next year could see the region turn a corner and things will pick up. My own business is recruiting and I’ve seen plenty of others doing well too.

“Business leaders have been working extremely hard over the past few years and it’s starting to pay off. However to really get out of the slump we need to be more productive and I hope that we’ll start to see more of this in 2013.”

David Gray, office managing partner at law firm DLA Piper said: “2012 was full of mixed messages for the North West economy as a whole with conflicting reports on levels of growth in key sectors for us like manufacturing, financial services and energy.

“For all that, my sense is that our clients are approaching 2013 with a renewed sense of cautious optimism. I think that this optimism is well-placed and we have a slowly strengthening manufacturing sector, the growth of which remains key to economic recovery.

“Fortune will continue to favour the brave and businesses which look to exploit overseas expansion strategies trading on the NW’s reputation for innovation and quality, will be the ones who will have a very happy 2013.”

Patrick Loftus, senior partner at Deloitte in the North West, agrees that exploiting international opportunities is vital for this region.

“2013 will see a challenging time for businesses as they drive forward with their growth plans against the backdrop of a continually tough economic climate.
 
“Working internationally will feature as a key item on many boardroom agendas. For many, cross-border interaction is increasing, particularly with North West backing initiatives such as the Manchester-China Forum, the role of MIDAS and UKTI in bringing delegations to our region and driving a collaborative approach to working globally.

“Consumer demand in emerging economies represents the single greatest opportunity for North West companies. The rise of middle income consumers in emerging markets continues, with around 1billion individuals in 2012.”
 
Mr Loftus belives “strong regional hubs” in the North West such as Airport City, MediaCityUK, the Co-op’s NOMA, Liverpool Waters and Manchester Science Park can also be growth drivers if they are successfully implemented.

He added: “Media will remain part of the region’s strategy for growth and no doubt we will see an increasing number of businesses regroup around the regional hubs such as MediaCityUK and the Sharp Project, demonstrating the depth and breadth of the media sector supply chain and opportunity for growth in this industry.”

Returning to the macro-economic picture, Paul Johnson, pictured right, head of the Manchester office of law firm Cobbetts, said: “The key for 2013 is that the economy keeps out of the headlines. I am not expecting a glut of good news stories, so if the bad news is kept to a minimum there is every chance we can at least build confidence, which is crucial to a sustained recovery.

“I think that among the sectors that will do well next year are creative, technology and renewables, playing to the strengths of Manchester and the North West. Developments relating to fracking in the region will also be interesting to observe.”

Rob Cotton, pictured below, chief executive at NCC Group believes Manchester and the North West can  be a showcase for economic success in 2013.

He says: “Yes – the financial climate isn’t particularly giving, but this means the most innovative and successful companies will rise to the challenge. We’ve shown that high revenue and profit growth is an achievable goal, as have many other businesses in the region.

“The city’s businesses need continued investment in technology if they’re to realise their full potential – broadband and connectivity in particular should be priorities for the council and decision makers.”

From an operational perspective he expects the trend of workers using their own technology at work – a phenomena known as bring-your-own-device (BYOD), will continue, but warns this could cause a “corporate security nightmare” if companies don’t take steps to protect data.