Manufacturing revival ‘sparks entrepreneurial activity’
THERE has been a revival in entrepreneurial activity across the North West as the number of companies with shares changing hands increased by 23% in the second half of 2012 – the second largest rise after London.
According to the latest Barclays Entrepreneurs Index, over 1,500 growing companies in the North West had shareholder changes in the second half of 2012, compared to nearly 1,300 in the second half of 2011.
The report also reveals that despite the North West being second place only to London in terms of year on year increase in companies with shares changing hands, the average profit of these companies fell marginally to £1.2m in the second half of 2012, compared to the £1.3m profitability posted in the second half of 2011.
The North West saw the highest proportion of entrepreneurial activity take place in the industrial sector, which consists mainly of manufacturing companies, with 595 growing industrial companies recording shareholder changes. This marked a rise of 45% in the region, the third highest increase nationally.
Alongside the significant growth in shareholder changes in the industrial sector in the North West, the technology sector in the region also saw a 41% increase in the number of companies with shares changing hands. The finance sector in the North West also saw a marked uplift, up by 134% from the second half of 2011.
A number of expert panellists quoted within the report attributed the boost in entrepreneurship activity in the North West to the £1.2bn revolving infrastructure fund in Manchester, a key element of the Core City Deals, combined with private investment by initiatives such as the £155m North West Fund.
Alan Edwards, director of Barclays Wealth and Investment Management in Manchester, said: “Since our first Entrepreneurs Index report last autumn, we have watched with interest how the picture for both business activity in the North West, and the whole of UK and Ireland, has shifted. It is encouraging to see that active companies in Manchester have shown not only resilience in the face of instability, but even remarkable growth in entrepreneurial activity and employment. The resurgence of traditional industries, as well as reinvestment made by entrepreneurs post-exit, is further proof that entrepreneurs are the engine room of the economy.”
The Barclays Entrepreneurs Index tracks one component of the entrepreneurial lifecycle, examining shareholder changes of growing businesses with turnovers of £5m-£200m. Taking data from Companies House, the report works on the basis that the driving force behind a partial or full change of shareholding in a growing company is likely to be a liquidity event, triggered by individuals selling or transferring their stakes in businesses.
