Regions’ firms plan to invest £158m
INVESTMENT: Businesses in Yorkshire are planning to invest £158m over the next two years after the Conservatives’ victory in December’s General Election removed Brexit uncertainty, a survey has revealed.
The research was carried out after the EU Withdrawal Bill was voted through the House of Commons this month.
BUSINESSES in Yorkshire are planning to invest £158m over the next two years after the Conservatives’ victory in December’s general election removed Brexit uncertainty, a survey has revealed.
The research, which was carried out after the EU Withdrawal Bill was voted through the House of Commons this month, found that small-and-medium-sized enterprises (SMEs) in the region were previously some of the most downbeat in the country, with 66 per cent worried about the future.
However, the election seems to have brought a change of mood, with 47 per cent saying they are now more upbeat, according to finance specialist Together.
Nationally, SMEs are planning to spend £1.7bn over the next two years, with more than a quarter of owners and senior executives looking to move to new offices, and 23 per cent expecting to expand their workforces.
SMEs in the North-East are the most upbeat, with 57 per cent of respondents saying they were optimistic after Brexit uncertainty ended.
The least optimistic SMEs are in the east of England and Wales, with just 27 per cent of businesses in those areas confident about the next two years, and planned spending increases of £102m and £31m expected respectively.
London remains the region where the most extra investment by SMEs is expected – rising to £393m – followed by the SouthEast at £337m.
Andrew Charnley, head of corporate relationships at Together, said: “Our survey has identified major commitments, in the North and Midlands in particular, where firms plan to spend more than a third of the cash.
“However, they will need support from lenders who do not take a ‘one size fits all’ approach and are willing to look at proposals in the round, including focusing on business prospects and regional differences.”
About a fifth of SMEs – 21 per cent – said they had postponed plans to move premises because of Brexit uncertainty, while 23 per cent delayed pay rises for workers and 19 per cent had deferred plans to take on more employees.
However, the decisive general election result means 42 per cent of firms are now optimistic about their prospects compared with only eight per cent which would have been optimistic if the uncertainty had continued.
Not all businesses agree – two out of five say the departure from the EU makes no difference, Together added.
More than half – 54 per cent – of SMEs questioned had initially been pessimistic, saying Brexit uncertainty had been holding back their businesses. That figure has now dropped to just 18 per cent since the election.
The survey comes as new research by the UK banking and finance industry trade body UK Finance found that the banking sector provided £1.3bn of new lending to SMEs in Yorkshire in the first three quarters of 2019.
Stephen Pegge, managing director of commercial finance at UK Finance, said the figure was a slight increase on the same period the previous year.
“Businesses in the region should be confident in approaching their lender for finance, as eight in ten loan applications from SMEs continue to be approved,” he said.
“However, demand for finance amongst this cohort has fallen in recent years, with only one in ten SMEs citing access to finance as a major barrier facing their business.
“Many firms are instead choosing to build up their cash deposits amid uncertain trading conditions.”
£158M The amount of money businesses in Yorkshire are planning to invest over the next two years.