Region’s Manufacturers are Optimistic

01/03/2010

As Manufacturing Week launches today, 1 March 2010, the National Business Survey which was conducted on behalf of Yorkshire Forward, can reveal that Manufacturers have a positive outlook for the next year.

With 38 per cent expecting the climate to improve and 38 per cent believing it will remain stable, this optimism has been created due to better exchange rates helping exporters and improved demand. Expectations of domestic orders have improved across all sectors, but the manufacturing sector in particular has benefited.

Businesses in the region are more optimistic about their prospects than at any time in the last 18 months, with 29 per cent expecting the business climate to improve in the next 12 months according to data.

Whilst there are continued challenging conditions facing businesses in Yorkshire and Humber, fewer businesses reported deteriorating performance in November 2009 compared to June 2009. This is a sign that a stronger operating environment and more favourable demand conditions are beginning to impact business positively. The survey provides strong evidence that market conditions are stabilising with 22 per cent of businesses reporting improvement in performance compared to 15 per cent in June.

The recovery could be arriving just in time as research shows that businesses have been stretched to their limits by the recession, and there are concerns about the effects of any further downturn. Almost a third (30 per cent) feel that they are not well placed to weather another dip in economic conditions. Indeed, the number of firms at risk has grown since June 2009; where 26 per cent felt they were not well placed.

However, the positive impact of these tough market conditions is that over two thirds (68 per cent) of regional businesses have been motivated to pursue new markets and customers as a direct result of the economic crisis. These business practices will enable business to grow strongly as the recovery continues.

Demand for finance is increasing, although it is unclear whether the finance will be used to fund expansion or as a lifeline to allow businesses to continue trading. Yorkshire Forward’s survey shows a fifth of firms will need to raise new sources or renegotiate existing finance or credit in the next twelve months.

Larger businesses are finding it easier than smaller businesses to access finance or credit. At the same time larger businesses, those with more than fifty employees are continuing to perform better than smaller businesses, highlighting the need to support companies of all sizes to maintain a more stable economy.

The survey continues to show that businesses in Yorkshire and Humber that use Business Link are likely to perform better, with 36 per cent of businesses who said their performance improved over the last 12 months having used Business Link Yorkshire. Over nine in ten businesses in the region are aware of Business Link (93%), 31% have used the service and 27% plan to use Business Link in the next 12 months.

Reducing CO2 emissions is high on regional businesses agendas with over 45% having taken steps to cut emission - which not only has a positive effect on the environment, but also their bottom line too.

Patrick Bowes, Chief Economist at Yorkshire Forward comments;
“Manufacturers in the region are much more optimistic about business prospects in 2010, especially the “bounce back” in new orders in the UK market. It’s positive to see that companies are taking steps to reduce carbon emissions as not only does this help Yorkshire and Humber to become a low carbon economy, its also improves businesses overall economic performance making them more competitive.

 “We have worked hard in 2009 to support businesses to make sure they tap into new markets and it is particularly encouraging that up to 68 per cent of the region’s businesses now see the development of new markets as their top priority in responding to the upturn in 2010.”

Notes to editors

  1. The National Business Survey is one of the largest and most statistically robust of its kind carried out in England and Northern Ireland with over 5,300 companies responding from all sectors of the economy. Respondents are senior business leaders within their organisation.
  2. The survey is carried out twice a year and asks a variety of questions ranging from business optimism to orders and output, skills issues, cost pressures and environmental performance.
  3. The survey uses a predominantly postal methodology with the option to complete the survey online. Data are weighted to represent the regional business profile by business size (number of employees).

Yorkshire Forward

  • Yorkshire Forward is the Regional Development Agency behind the economic regeneration of Yorkshire and Humber. It aims to make a positive difference by investing in jobs, improving towns and cities, and in supporting businesses throughout the region. 
  • Yorkshire Forward’s investment across the region is maximised by attracting European Regional Development Funding. 
  • For further information, images or to arrange an interview, please contact Laura Scholey, Press Manager on 0113 3949540 or email laura.scholey@yorkshire-forward.com