Firms call for cash injection to lift economy

More than a quarter (28 per cent) of businesses in Yorkshire and North Lincolnshire surveyed as part of Bibby Financial Services’ Business Factors Index believe that a Government pledge to increase public spending would be the best way of boosting the region’s economy.

A separate survey, carried out by professional services firm RSM Tenon, concluded that businesses in the south of England are set to grow as their counterparts in the north contract.

According to the Bibby Financial Services’ Business Factors index, around 22 per cent of businesses in Yorkshire and the Humber are finding conditions “really tough and are only just surviving”.

However, this figure is down from the 41 per cent who said they were in difficulty during the third quarter of 2010, which suggests that trading conditions are improving in the region.

This is supported by the survey’s findings that more than a quarter of firms are feeling positive.

Twenty eight per cent reported that they were “hopeful for the future”.

The Index is a quarterly report which tracks the turnover levels among Bibby Financial Services’ 3,800 clients.

The trends derived from this data, which goes back to July 2007, have been collated along with the results of a series of interviews conducted with 300 business owners, from a range of sectors across the UK, to produce a comprehensive overview of how firms are faring.

Yorkshire remains one of the most economically distressed parts of the UK with 10,685 companies in the region facing “significant” or “critical” financial problems, according to the latest quarterly Red Flag Alert from UK business recovery specialist Begbies Traynor.

The region’s construction firms are among those experiencing significant problems.

Many property, business services and IT firms are also strug-gling.

The index also found that nearly a quarter of those surveyed (24 per cent) believed we could still feel the effects of the recession for at least three years, while more than half (51 per cent) of firms said they were cutting costs to prepare their business for further economic challenges.

Only seven per cent of businesses think that keeping interest rates at the current rate of 0.5 per cent would stimulate economic recovery in the future.

Graham Cooper, Bibby Financial Services spokesman for Yorkshire and North Lincolnshire, said: “In the final three months of 2010 there were some positive signs amongst the region’s business community, including a significant decrease from the previous quarter in the number of firms reporting that they are only just surviving.

“However, against a backdrop of the largest decline in house prices for a year, higher inflation, an accelerated decline in business confidence, and higher unemployment forecast for 2011, it is clear that businesses in Yorkshire will face renewed challenges over the coming year.”

A quarterly survey of entrepreneurs, carried out by RSM Tenon, revealed that while 30 per cent of companies in the north intended to increase their staffing levels, 28 per cent would be letting workers go.

By contrast, 40 per cent of companies in the south said they were intending to hire more staff, while just 15 per cent reported they expected to be making cuts.

Andy Raynor, chief executive of RSM Tenon, said: “Confidence levels throughout the UK are returning to levels seen at the start of 2009.

“However, a regional difference in the way that businesses intend to tackle planning is emerg- ing.

“This is most noticeable in businesses’ intentions for their workforce where there is a marked difference in the south.

“The strong planned investment in employees in the south is not mirrored throughout the rest of the country, despite the small regional difference in business confidence and expected demand for goods and services.”