Yorkshire Mid-tier Businesses Plan Investment And Hiring Drive To Spearhead Recovery
Yorkshire businesses plan to embark on a major investment and hiring drive in 2021, as the UK continues to follow the roadmap out of the coronavirus pandemic.
"The combination of generous Government incentives, and a clear roadmap out of the coronavirus pandemic, has injected a renewed sense of confidence amongst Yorkshire businesses..."
Medium-sized businesses in the region look set to spearhead the UK’s economic recovery, with more than three quarters of businesses (85%) stating that 2021 is the year to invest.
95% of Yorkshire businesses plan to recruit more staff in the next six months
More than three quarters of regional businesses say 2021 is the year to invest; 42% are planning new investments as a direct result of ‘super deduction’
67% predict a return to pre-pandemic revenues within a year.
According to the latest Rethinking the Economy survey from accountancy and business advisory firm BDO LLP, more than a quarter (27%) of Yorkshire businesses plan to either expand by investing in new locations or acquiring other businesses. The renewed drive follows the Government’s capital allowance announcement in last month’s Budget, with nearly half of businesses (42%) planning new investments as a result of the Chancellor’s ‘super deduction’ initiative.
Business confidence has also increased, as 67% of businesses in the region expect revenues to return to pre-pandemic levels within a year of the strictest restrictions being lifted.
Mid-sized, PE owned and AIM listed businesses, what BDO calls the economic engine, account for less than 1% of UK businesses overall, but contribute £1.4tn in revenues and provide one in four jobs. In the five years leading up to the start of the pandemic, these businesses grew revenues by 46%, despite Brexit-related uncertainty.
Commenting on the findings, Terry Jones, partner and head of BDO in Yorkshire and the North East
, said: “The combination of generous Government incentives, and a clear roadmap out of the coronavirus pandemic, has injected a renewed sense of confidence amongst Yorkshire businesses when making key strategic decisions in the months ahead.
“Mid-sized businesses will play an integral role in the UK’s overall economic recovery. Pre-pandemic, mid-tier businesses provided a significant proportion of jobs in the region and this looks set to grow over the next 12 months, with 65% of businesses planning to hire more permanent staff. Half are looking towards a temporary workforce in order to provide the flexibility to balance both resource and market demand during the course of 2021. In light of the Government’s £3,000 incentive to hire apprentices, the majority (62%) also said they would hire within the next six months.”
Last month, the Industrial Strategy Council – an advisory group led by Bank of England chief economist Andy Haldane – said the UK’s plans to spread economic growth into the regions of the UK appeared “over-reliant on infrastructure spending and the continued use of centrally controlled funding pots thinly spread across a range of initiatives”.
However, according to the Rethinking the Economy survey, three quarters of Yorkshire businesses feel the Chancellor promised enough to support the regional ‘levelling up’ agenda in his Spring Budget. Furthermore, 65% believe that their region will be given enough financial support over the next 12 months as a direct result of the pandemic.
Jones added: “The recent announcement by the Government to locate the UK’s first infrastructure bank in Leeds and one of eight newly-created Freeports in the Humber has generated a strong sense of optimism amongst Yorkshire businesses about the ‘levelling up’ agenda. However, there is clearly still work to be done to ensure that businesses can practically access those funds, and targeted support is given to each area. This will be vital in supporting businesses on the road to recovery.
“The reality is, few businesses have come away from the crisis unscathed, with nearly a third of Yorkshire businesses (32%) stating that their business model or product has, or will need to change as a result of the pandemic. While there is a genuine reason for renewed confidence, the road ahead remains a challenging one.”