Journal Business Column: August 2018
Posted on the 23 August 2018
It is encouraging to see that the perceived summer slowdown hasn’t impacted on the confidence of the North East business community, as we gear up for peak time in the business cycle when autumn returns.
On the front page of The Journal (13th August) it was welcome news to read about how ‘North East firms are beating London’, which is something that we don’t often hear about. It is largely the opposite that is reported across various media outlets, from outside the region of course, as the North is historically given a bad reputation.
Nevertheless, it is promising that our area is being shouted about and receiving the praise it duly deserves.
The article in question was referring to a report that was commissioned by Vodafone that revealed regional companies are more productive than those in London.
According to the research, of which 500 businesses were surveyed, 51% of business leaders in the North East and Yorkshire and the Humber said that their companies had become more profitable over the last 12 months, compared to 46% in the capital.
The report added that the two regions outperformed London in terms of revenue growth as 57% revealed growth in turnover, as opposed to 49% among business leaders in the City.
It bodes well for the future success of the entrepreneurs and business leaders who are creating the jobs needed in the region to stimulate positive economic activity and supporting people living and working across the North East.
The findings are consistent with another recent survey among businesses in the North East, as the latest Business Barometer from Lloyds Bank Commercial Banking revealed a 19 point rise in July in regional companies’ confidence about their own prospects. The barometer, which questions 1,200 businesses each month, did show a drop in economic optimism which fell by 21 points from the month before.
The research was largely positive, though, as it positioned the region with an overall confidence of 34%, above the national average of 30%. Business confidence is a key indicator of the economy and the prospects in the North East are beginning to bear fruit.
This renewed confidence can only be a good thing, especially for the promotion of scale-ups – businesses which have grown by at least 20% in the last three years.
Increased confidence to invest in new enterprises and establish a business is encouraging entrepreneurs and business leaders to realise their scalable ambitions, which, in turn, is supporting the overall prospects of the region, while contributing to the wider economy.
Our region is home to many scale-up companies that are able to maintain their high performance levels under an increased workload through winning new contracts, which is leading to further expansions and, crucially, the creation of new jobs.
Unemployment across the North East is currently at a record low of 4.3%, which has fallen by 66,000 since 2010. The national outlook is equally encouraging as levels are at their lowest since 1975, with 1.36m people currently out of work.
While the emergence of scale-ups and the contributions made by the entrepreneurs who are building businesses to create job opportunities cannot take all the credit, they do play an important role in the region’s economic prosperity and gains in private sector employment.
London and the South may receive all the plaudits and media attention, but this ‘small victory’ for the North is definitely encouraging and gives a clear picture of where the region is headed.
The jobs market is constantly improving and increased business confidence will play a large role in ensuring that trend continues.