State of the Region: UK markets still popular but more firms look abroad for business
WHILE most firms in the West Midlands believe national and regional markets offer them the best opportunities to progress their business, more companies in this region are prepared to look abroad for growth, TheBusinessDesk.com’s annual State of the Region survey has found.
The study showed 69% of firms in the region believed the West Midlands (35%) or UK markets (34%) still held the best prospects for their business.
However, at 30% more firms in the West Midlands are willing to look to international markets for opportunities than their competitors in Yorkshire and the North West.
These are some of the key findings from TheBusinessDesk.com’s annual State of the Region survey, which gives a comprehensive barometer of business sentiment across the online news service’s three heartlands of Yorkshire, the North West and West Midlands.
TheBusinessDesk.com has once again run this milestone project in association with lead sponsor, law firm DLA Piper. The initiative is also supported by Yorkshire Bank and the CBI.
To download a copy of this year’s report click here
The third year the survey has been run in the West Midlands, it has been completed by a strong mix of professional services firms although at 30%, manufacturing is the largest single response sector.
Of the firms willing to look abroad for new business fewer firms in the region thought the Eurozone represented a good risk.
Of those responding to our survey, more firms in the West Midlands said they were willing to gamble on the opportunities offered by the BRIC countries of Brazil, Russia, India and China (26%) or the so-called CIVETS, comprising Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa (13%) than their counterparts in the other two regions.
The United States remained a strong choice for all three areas but Latin America and the emerging South East Asian markets proved less popular.
So far as the biggest challenge to international was concerned, firms in the West Midlands said protecting brand identity (23%) remained their foremost concern.
Growth is most likely to be achieved organically according to the majority of our respondents, although more firms in the West Midlands (17%) favour acquisitions than in other areas.
The picture is similar for international growth although fewer firms in the West Midlands are willing to consider joint ventures than in Yorkshire and the North West. This is despite the success of some firms such as Jaguar Land Rover, which has opted for a Chinese partner for his new production venture into that country.
Charles Cook, Corporate Partner, DLA Piper in Birmingham, left, said: “It is extremely encouraging to see more positive aspirations for growth this year – a reflection of an increasingly upbeat outlook. The trends penetrating this year’s results reflect a focus on growth through consolidation, increased penetration of domestic markets and product development.
“Almost 70% of respondents see regional or national markets as their best opportunity for growth compared with just 30% who report that their aspirations are centred upon international expansion. However, as the UK economy remains sluggish and UK growth forecasts revised down by the OBR, many businesses could benefit from considering international opportunities, in particular the emerging economies. It is notable that this year the BRICs have overtaken both Europe and the USA as the most popular destination for West Midlands businesses who are looking to foreign markets.
“Perhaps due to ongoing concerns surrounding price pressures and demand, almost half of respondents from the West Midlands are focusing on organic growth in place of acquisitions, joint ventures or alliances, mirrored by the fact that more than half are not looking to secure any new bank lending in the next 12 months. For the region to prosper, we need business leaders to convert their rising confidence into the execution of strategic plans for new investments and opportunities.”
Tomorrow: The Region
