Region prepared for the worst, says Yorkshire Forward survey

THE prospects for Yorkshire’s construction and leisure sectors may be bleak but transport and communications firms are bucking the trend, according to regional findings from the latest National Business Survey.

Although more than half of the firms questioned predicted a deterioration in business trading, companies operating in distribution, transport and communications were “very bullish” in their analysis.

Unsurprisingly companies operating within the construction and hotel and catering sectors showed the sharpest fall in business confidence.

The survey, which is the second of its kind to be commissioned by the country’s regional development agencies (RDA), also found that larger organisations are more pessimistic about their future performance than their smaller counterparts.

Other findings such as the importance of business planning, marketing and support mirrored national figures.

Yorkshire firms with formal business plans were more upbeat about their future and more likely to invest in marketing, sales and innovation.

The research, which was carried out by Ipsos Mori, also highlighted regional differences with Hull, Barnsley, Rotherham, the East Riding, York and Leeds feeling less optimistic on employment while Sheffield, Kirklees, Calderdale, Wakefield and North Yorkshire expect employment pressure to ease in the next 12 months.

Click here to read Anastasia Weiner’s analysis of the fall-out of the report

Employment losses are most likely to be felt in the construction and hotels and catering sector, but are likely to be less severe than anticipated in the service industries notably transport, storage, communications and financial services.

Patrick Bowes, chief economist for Yorkshire Forward, said that it was difficult to estimate the number of job losses for 2009, but that the figure could be anywhere between 35,000 and 55,000.

However, he stressed that there were still some 30,000 vacancies across Yorkshire and Humber, with 17% of business interviewed reporting they had found it hard to fill those vacancies.

Terry Hodgkinson, chairman of Yorkshire Forward, said: “In this difficult economic climate it is more important than ever that we are constantly in touch with business on the ground to tailor business support effectively and efficiently. The National Business Survey helps us do just that across all sectors.”

He added that the region’s RDA was working with support agencies such as Business Link Yorkshire and local authorities to ensure that businesses gain the practical support they need to help them weather the economic storn and come out stronger when the upturn comes.

“We are also working to ensure that when redudancies do occur those affected are well supported in being connected to jobs and any appropriate training.”

Despite the semi-positive findings, including increasingly robust export orders, Yorkshire Forward said it was revising its short term growth forecast to -2.7%. In 2007 annual growth was 3.7%.

More than 60% of firms said they were operating below capacity with 54% of respondents reporting a fall in profit margins.

Cash flow too has become a critical issue, particularly for SMEs, highlighting the importance of credit support for businesses during the recession.