THE CBI has outlined its confidence in the ability of Yorkshire’s business community to sustain meaningful economic growth in 2016.
Lucy Thornycroft, the CBI’s regional director, believes business leaders in the county are approaching the New Year filled with optimism about their prospects over the coming 12 months.
However Ms Thornycroft has cautioned that employers face some key challenges, including the uncertainty surrounding the UK’s continued membership of the European Union and an ongoing skills gap.
“I think we have continued to see economic growth and increased confidence this year: we expect the economy to go further in the next year but there are still a number of risks facing Yorkshire business, most notably the Chinese economy,” she said.
“Businesses are very concerned about the cumulative burden of recent policies such as the introduction of the national living wage, the apprenticeship levy and continued concern about regulation.
“All of these add costs to the bottom line and will be key challenges for business next year. We will look to the Government to take action in all these areas.”
The Prime Minister has pledged to hold a referendum on the EU before the end of 2017 but has not ruled out the possibility that the Government could campaign for the country to exit.
The possibility that the UK could turn its back on a marketplace comprising 500 million customers fills many of Yorkshire’s business leaders with dread and the CBI has made no secret of its desire to stay within the EU - but not at any price.
“The outcome of the forthcoming referendum on EU membership continues to be a major issue that will continue to influence the business agenda,” said Ms Thornycroft.
“The overwhelming majority of businesses in Yorkshire want key reforms to the EU but accept that we are better off remaining as members.”
A CBI survey of 310 companies this summer revealed that two thirds expect their need for staff with higher level skills to grow in the years ahead, but 55 per cent fear that they will not be able to access enough workers with the required skills.
The survey also highlighted that demand for highly skilled workers is particularly strong in sectors critical to the rebalancing of the economy – engineering, science and hi-tech, construction and manufacturing.
And with many Yorkshire businesses sitting within those three key sectors, Ms Thornycroft feels more needs to be done to equip current and prospective employees with the skills they need.
“The top issue and challenge for Yorkshire business is access to a skilled workforce,” she said.
“We continue to see many Yorkshire businesses struggle to recruit skilled workers.
“Business and Government will need to continue to work together to ensure that immigration policy doesn’t undermine the ability of business to recruit people with the right levels of skill.”
The CBI has this year called for a greater sense of urgency from central Government to provide funding for the infrastructure that is critical to the ambitions for a Northern Powerhouse which has Yorkshire at its centre.
Transport links across the Pennines and from North-South remain under-developed and the CBI is committed to campaigning for improved transport solutions.
“The Northern Powerhouse is a top priority for businesses across the region and the CBI,” she said.
“We have to understand how devolution will allow businesses to unlock growth across Yorkshire and the wider Northern region.
“Devolution isn’t necessarily a tool that’s going to drive growth; it will be the businesses themselves which do that
“Their absolute commitment to the Northern Powerhouse comes down to rebalancing the economy and ensuring we can compete in the global marketplace.
“The key is going to be around driving up the productivity levels in the UK that have held back growth.”