Yorkshire diversity puts business in a strong place, says report
The region performed exceptionally strongly in a special report on how diversity helps SMEs to meet economic challenges, contained in Q2 of the SME Health Check Index.
Leeds in particular represents a cause for optimism, with the city demonstrating the most diverse mix of businesses among the 25 cities covered by the research.
With its broad range of manufacturing activities, Leeds also has a very balanced services sector, with well-established industries including retail, computer programming, real estate and legal services.
Meanwhile, the region as a whole was second only to the West Midlands in terms of commercial diversity. This relative strength compared with other UK regions underscores the broad SME base that bodes well for the region’s future prospects. There is no doubt that a diverse and balanced range of SME businesses is a major asset for the region, promoting sustainable growth, with less vulnerability to sector-specific shocks and political volatility.
Moreover, Yorkshire SMEs exhibited impressive levels of product complexity, with only one in eight businesses putting most sales down to a single product or service. This level of product complexity increased further when focusing solely on Leeds.
Another source of encouragement for the region is its supplier diversity. Over the past 12 months, SMEs from Yorkshire and the Humber used on average 14 different suppliers – more than in any other part of the country.
This is not to say the region does not face some tough challenges. The latest SME Health Check Index revealed a 14-point decline to 39.9 in the performance and outlook for Yorkshire and the Humber’s entrepreneurial businesses. This compares to a UK average of 41.9 – down 6.9 points on the previous period. As with other UK regions, the performance of SME businesses in Yorkshire and the Humber should be seen against a background of heightened uncertainty, slowing economic growth and rising costs.
The figures for Yorkshire and the Humber were also influenced by a significant rise in the region’s share of SMEs operating below capacity, as well as a more modest decline in business confidence.
Nonetheless, there are many reasons to remain positive as we look to the future. The health of the UK’s SMEs – including those of Yorkshire and the Humber – is pivotal to the success of the wider economy. And, despite the fall in the region’s overall index, the healthy diversity of our SMEs is truly impressive.
Here at Yorkshire Bank we are committed to helping SMEs prosper and grow. We are confident that, with a careful strategy and access to adequate support, businesses have the determination and resources to survive and prosper.
This column has been written by Gavin Opperman, group business banking director, Yorkshire Bank.
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