End of year disruption threatens to de-rail North West recovery but businesses pledge to invest in talent, tech and global expansion. North West business leaders fear Covid-19 restrictions, talent shortages and fuel price increases will impact their end of year trading, according to new research from accountancy firm, BDO.
- Mid-sized businesses in the North West fear Covid-19 restrictions, talent shortages and fuel price increases will impact their end of year trading
- Rising inflation is set to take a toll with almost a third of businesses planning to increase their prices as a result
- Despite ongoing issues, 63% of businesses expect to return to pre-pandemic revenues in the next 12 months
- Looking ahead for 2022, businesses are calling for Government investment in digital infrastructure in the region and set own investment intentions around talent, tech and international expansion.
The bi-monthly Rethinking the Economy survey of 500 leaders of medium-sized businesses reveals nearly a third of businesses in the region are planning to increase the prices of their goods and services as a result. Despite these pressures, nearly two thirds (63%) of companies in the region expect to see their revenues return to pre-pandemic levels within 12 months.
There is a sense of cautious optimism looking into 2022 with half of the North West companies surveyed prioritising investment in digital, creating new jobs or international expansion to support future business growth. More than a quarter of North West businesses are looking to drive growth into the US and another 26% are looking to expand into Asia in 2022. Domestically, growth will come from expansion across the North West region and into the South East of England.
The research provides an insight into the mid-sized businesses which BDO calls the ‘economic engine.’ This group of companies comprises the mid-sized, private equity-backed and AIM-listed businesses, which contribute £1.3 trillion to the economy and create almost 8 million jobs.
When asked which area of public spending would have the greatest positive impact on their business in 2022, nearly a third (30%) of North West companies called on the Government to invest in digital infrastructure as a priority for growth. Despite current concerns around supply chain and talent shortages, this ranked ahead of investment in infrastructure and skills and job creation.
More than a quarter of businesses shared concerns that Government-imposed environmental and sustainability targets could impact their business over the next 12 months. However, the data also showed companies in the region are already taking this into their own hands with all North West companies surveyed having strengthened or set new sustainability targets following the UK’s presidency of COP26.
Ed Dwan, partner and head of BDO in the North West said: “Businesses in the region have been hoping for a strong finish to a year which started with so much uncertainty. Against a regional economy back still reeling from the aftershocks of Covid-19 restrictions, businesses have continued to face issues from staff shortages to rising costs.
“However, even with continued speculation around interest rate rises ahead of the Monetary Policy Committee decision later this month and fresh concerns around Covid-19 restrictions, North West companies are demonstrating ambition and drive as they plan for 2022.
“Investment intentions around digital, skills and international growth, alongside a call for government spending on digital infrastructure suggest we will see an innovation-led recovery in the region’s new economy. This is hugely encouraging as a recent report from The Productivity Institute suggests emerging clusters with leading-edge R&D capabilities could help towards improving productivity across the region which is currently lagging behind other UK regions in terms of growth.”