Around the end of last year, business forecasts for the North West were somewhat bleak. This year, however, has seen the region get off to a great start, with business confidence up by 20 points. The annual Business Barometer suggests that not only do business owners feel better about the overall direction of the economy – perhaps because trade barriers likely to be occasioned by Brexit are not due to kick in for another ten months – but feel better about their own immediate prospects and are more ready to invest.
Champing at the bit
After deferring investment for a long time because the direction that Brexit was going to take was unclear, many business owners are leaping at the opportunities offered by a few months’ stability while the UK remains in the Customs Union. Because many delayed investments are being made at once, there’s a lot of money moving around in the economy, which creates further opportunities for everyone. There are almost 600,000 private sector businesses in the region, many of them currently seeking to build major new trading relationships.
The importance of staying flexible
The risk that comes with all this activity is that businesses could overextend themselves in the run-up to what is likely to be a volatile period around the end of the year. With this in mind, it’s important to try and stay flexible. This could mean hiring equipment as needed rather than buying it if you’re not sure that you can get enough work to justify its use. It could also mean outsourcing to fill positions in the sort term rather than taking on staff and setting yourself up with what may become unsustainableoverheads. Consider hiring storage space for materials as an immediate-term solution to increased productivity, rather than increasing your operating costs by moving into larger premises.
Key sectors
Inevitably, some sectors have been doing better than others over recent months, and the large scale patterns look likely to remain similar over the coming months. Outside Manchester and Liverpool, restaurants have been struggling, though pubs are still holding on fairly well. Retail, however, is up overall – probably because consumers are also taking the chance to make delayed purchases during a period of comparative stability. The ageing population means that the steady growth of the care sector is likely to continue, and the childcare sector is also expanding. Both of those are adding to demand in the construction sector as new buildings need to be constructed and old ones modified.
With an increasing number of businesses choosing to move out of London in search of more affordable premises, investors have their eyes on the North West as an area with strong future potential. Businesses which retain the ability to adapt to circumstances and succeed in weathering the coming storms will be in a strong position to take advantage of reduced competition from the southeast of the country over the coming years. What your business does this year could be more important than any other in determining its long–term prospects.
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