High costs and difficulty expanding their business continue to stifle growth for Yorkshire companies, according to new data from accountancy and business advisory firm, BDO.

BDO’s latest bi-monthly Economic Engine survey of 500 mid-sized businesses has revealed that 68% state they will struggle to expand their business in the coming months, through entering new markets or increasing their physical footprint.

Cost pressures will remain a significant challenge for regional companies over the next six months, with half of businesses (61%) concerned about higher operational costs, including rent, energy bills and the cost of borrowing.

Ahead of next month’s Spring Budget, Yorkshire businesses are calling on the Government to address ongoing issues around skills, access to capital, or investment in government support for businesses, such as increased HMRC resource.

The survey showed that more than half of regional businesses (55%) would like to see more support to resolve ongoing staff and skills shortages, including reforming the Apprenticeship Levy and placing greater focus on helping working parents, with 52% calling for better access to private capital and government grants.

Terry Jones

Terry Jones, regional managing partner at BDO in Yorkshire, commented:
“In what could be the last Budget before a general election, the Government has a real opportunity to place growth and the interest of businesses at the centre of its announcement.

“Yorkshire businesses have continued to call on the Government to act with greater purpose on key areas such as access to capital, and skills. Complexity around tax remains a challenge for regional businesses, they want to see more Government resources to help businesses in the mid-market, including within HMRC.

“What’s more, around one in five Yorkshire businesses want long-term reform to streamline or lower business taxation, such as overhauling business rates, or cutting corporation tax.”

Despite the calls for reform, businesses in the region do not anticipate a reduction in corporation tax in the near future, with 39% believing the overall tax burden on their business will remain the same between now and 2025/26, and 39% anticipating that it will rise.

Jones added:
“Encouragingly, the appetite for growth from Yorkshire businesses remains strong. Our research shows the key to growth for many businesses over the next six months will include workforce improvements, business investment, and expanding internationally.

“There’s no doubt that trading conditions remain difficult. However, with the right support from the Government mid-sized companies in the region will continue to be the driving force behind the UK’s economic recovery.”