Yorkshire SMEs plan to expand over the next year

Friday 7 August 2015

New research carried out by Yorkshire Bank has revealed that small to medium-sized enterprises (SMEs) are largely confident about the economy in the next 12 months.

Nearly half (48 per cent) of SMEs in the Yorkshire and Humberside area believed the economy was stronger today than it was in 2008/9.

Many were hoping to expand in the near future, and planned to invest an average of eight per cent of their annual turnover back into their businesses over the next year. This is an improvement on last year’s UK average of six per cent reinvestment, and suggests that confidence is growing as the economic recovery continues to gather pace.

However, Yorkshire and Humberside are trailing behind the current UK average for turnover reinvestment, which stands at nine per cent.

When it comes to expansion, the most popular use of money is new equipment, which was the top priority for 25 per cent of those surveyed, followed by upgraded premises, or improvements to their existing location (18 per cent).

This shift suggests that small businesses, including contractors, in the area are preparing for a period of sustained growth, as well as feeling more positive about the marketplace in general.

Alan Young, regional director for business and private banking at Yorkshire Bank in Yorkshire and Humberside, said: “We know from official figures that the UK economy is healthier in terms of production, job creation and export levels.

"Our nation of small and medium-sized businesses is a good barometer to understand how well the economy is performing and our research shows SMEs are sufficiently confident in the economy to be increasing the level of investment in their businesses.”

This confidence seems to be part of a wider trend, as more people start to feel the effects of the economic recovery across the country.

The focus of the study also reflects the increasingly positive impact that entrepreneurs, small businesses and freelancers are able to have on the state of the UK’s finances. Recent data from the Office of National Statistics suggests that approximately 14 per cent of the UK is self-employed, showing that it is an increasingly popular and viable way to work.

The findings of the Yorkshire Bank survey should be encouraging for those who are considering making the switch to contracting. It’s also not just northerners who should take heart, given the data represents a vote of economic confidence outside London and south-east England.
This has often been the heartland of recovery, while other areas have not fared as well, so to see grassroots expansion in these areas is a particularly good sign.

By Victoria McDonnell

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