BDO report urges support for export-led recovery

WITH government funding cuts for industry thought to be likely, a report by business advisors and accountants BDO urges both government and business to focus on exports if the UK is to forge a prominent role in the new global landscape.

The report, Transitions – The New Economic World Order, outlines the opportunities open to the UK in the new economic world order and was developed alongside an expert panel convened by BDO.

The study notes that, as well as manufacturing sectors such as defence and pharmaceuticals, the UK also has world beating financial services, education, leisure and retail sectors which provide platforms for strong growth. 

But the report suggests that this can only be a reality if UK companies adapt to the new world order and exploit emerging markets.

Despite this, although George Osborne has promised tax support for manufacturing, government loans earmarked for industry are being reviewed.

In addition, many executives are limited in their outlook and are yet to prepare for the changing global landscape, the study suggests.

Eighty five per cent of UK board members admitted they are not actively preparing for competition from the next 11 countries that will become economic powerhouses over the coming five years, according to a poll commissioned by BDO.

Tim Clarke, corporate finance partner at BDO in Leeds, said: “Businesses have to look east – the Eurozone’s plight current confirms that relying on what’s just outside our front door is no longer enough. 

“The government’s emphasis at the moment is rightly on manufacturing exports.  But we should not forget our other world class businesses – including even the much reviled financial services sector – if the UK is to continue to play a lead role on the world stage.”

Jason Whitworth, manufacturing specialist partner at BDO in Leeds, added: “The UK is at a crossroads on the global map. While we welcome George Osborne’s plan to protect manufacturers under a new corporation tax framework, there needs to be a clear strategy that rebalances the economy and encourages exporting.

“This means removing red tape, providing specific support to mid-market manufacturers and supporting emerging technologies while not forgetting the UK’s traditional industrial base.”

The study by BDO is the first of a series of reports – called Transitions – that set out a definitive view of the trends that will shape the business world for the next decade.

The reports have been shaped by an expert panel, including some of the most influential members of the business and academic community.

Transitions comes hot on the heels of BDO’s 2010 Yorkshire Report, which is compiled by BDO’s experts, by aggregating the figures from the latest available accounts of the region’s 150 businesses.

This year’s report, which launched last month, reveals that 109 of the top 150 remain profitable and 42% of those actually increased profits in the year.

Some key sectors also held up well, particularly retail, where the two biggest companies in the group increased their combined revenues by £3.2bn.

The food sector, an important industry for the Yorkshire region, also saw profits rise by 8%.

Last night, BDO hosted a Yorkshire Report private dinner at Aspire in Leeds, where a panel of judges and the Rt Hon Sir Richard Needham, former Conservative MP and Trade Minister and now director for international and commercial affairs at Dyson, debated how the post-recessionary environment will affect Yorkshire business and what the future has in store for the region.