'˜No need for concern' as region's SME sector only UK area to fall

The SME Health Check Index, compiled by the Centre for Economics and Business Research (Cebr) alongside CYBG, showed that capacity, confidence and employment levels all taking a hit during the second quarter of this year.

The results mark the first time that employment levels have fallen in two years with the region falling from the second highest ranked area of the country in quarter one to eight for quarter two.

While the news that Yorkshire was the only region to register a decline, Oliver Kolodseike, a senior economist with Cebr and one of the report’s authors, said that performance had to be taken into context against what had been a very good first quarter for the region and there was no cause for alarm from the figures.

There was also some good news in that the quarter bore witness to the first rise in SME lending in a year.

The figures for Yorkshire stand in stark contrast to the national picture which shows the health of Britain’s SME sector to be at its highest level in 18 months.

Mr Kolodseike told The Yorkshire Post: “There are many reasons for the figures but it must be remembered they come against a significantly improved quar- ter.

“It is a slight drop and nothing major. The economy of the region is robust.

“Although confidence is down it is down from a high level and the fact that lending has increased is encouraging as access to finance is one of the key ingredients to help businesses who want to grow.”

David Duffy, CEO at CYBG, said: “We greet these results with cautious optimism; however there is no room for complacency. The UK’s future economic success will depend in no small part on the strength and general ‘health’ of our SME businesses and securing a path to sustained and stronger growth will be critically dependent on unlocking improvements in the UK’s productivity and business competitiveness.

“As banks we have a duty to help promote this confidence and ensure that we play our part in supporting local businesses to grow.

“The report’s findings also reinforce the need for the Government to continue its commitment to the Northern Powerhouse and Midlands Engine strategies and keep pushing the issues, ideas and ambitions to the fore- front.

“These two key strands of the Government’s Industrial Strategy are a vital part of delivering higher economic growth in the regions and there is encouraging momentum from stakeholders all over the North of England and the Midlands to ensure its success.

“However, as this index suggests, it’s not an easy task – while the North East is showing an improvement and tops our regional table, Yorkshire and the Humber is down slightly, with business confidence and capacity both taking a knock.”

Graeme Sands, head of business banking at CYBG, said: “At Clydesdale and Yorkshire Banks, we understand the importance of SMEs to the UK economy and the varying challenges businesses are facing, particularly given our experience in the North of England and Scot- land.”