East Anglia: Santander survey reveals growing optimism among region’s firms
- Credit: Archant
Businesses in East Anglia are significantly more confident about future growth compared with last year, according to new research from Santander Corporate & Commercial.
The average company with a turnover of £20million or less is expecting to grow revenue by 81% over the next five years, according to the report, compared with 68% in last year’s survey, although not as optimistic as the 88% growth predicted in 2011.
The number of businesses in East Anglia looking to grow both organically and through acquisition is at record levels.
More than a third (39%) of businesses in the region reported organic growth as their immediate short term priority, the highest in the UK, compared to 32% in 2012 and 28% in 2011.
The number of businesses looking to grow through acquisition has increased fourfold, from 3% in 2011 to 12% in 2013. Firms in the region are also keen to hire more staff, with 17% of firms stating this to be an immediate priority, up from 8% in 2012.
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Nationally, the study revealed UK businesses as a whole are predicting turnover growth of an average 134% in the next five years, equivalent to 18.5% a year, and up considerably from the 88% five-year growth forecast in last year’s survey, and the 104% forecast in 2011.
According to the research, stronger growth figures were also matched by a stronger outlook for employment with around one in eight (13%) UK companies stating that hiring new staff is an immediate priority, the highest it has been since 2011.
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SMEs also reported they are turning to acquisitions for growth, with the number reporting this to be an immediate priority doubling to 14% this year from 7% in 2012 and up from 5% in 2011.
Despite the increase in optimism, however, UK businesses are still facing stiff challenges with half (50%) of those polled reporting they are focussed on “survival” as an immediate priority. This is down from 54% in 2012 but higher than in 2011 when the figure stood at 47%.
The tough trading environment is still seen as the biggest challenge to growth by UK businesses, cited by 46% of respondents, although this is down from 50% in 2012.
Regionally, the number of businesses in East Anglia which reported access to capital as a barrier to growth is at a three-year high. The research revealed that 43% of companies found this a challenge, more than four times the amount in 2011 (9%) and 2012 (10%). This finding, however, is marked by a steep rise in the number of companies reporting a lack of financial know-how as a hindrance to growth, up to 13% in 2013 from 1% in 2012.
Martyn Dawson, regional director for Santander Corporate & Commercial, said: “Understandably, many businesses in the East Anglia region remain cautious in the current trading environment.
“However, our latest growth survey reveals a more optimistic five-year growth outlook compared to 2012.
“It has also found that since 2011, when our first report was published, more SMEs in the UK are looking at acquisitions to spur growth as well as investing in organic expansion, which we believe is positive news for the UK economy. Figures that indicate firms are increasing efforts to hire new staff are also to be welcomed.
“Given the increase in optimism, we encourage businesses to remain focused on business fundamentals and plan responsibly for future growth.
“For companies that have survived the past few years of economic volatility and are well positioned to seize future opportunities, basics such as effective cash flow management, first-rate customer service and long-term strategic planning remain crucial to realising their growth ambitions.”
: : Click here to join the chat or submit a question for in a live webTV broadcast at 1.30pm today between David Riches, director of operations at the British Chambers of Commerce, and Marcelino Castrillo, head of SME, Santander Corporate & Commercial, on the findings of the survey and the outlook for SMEs.