North West medium-sized business sector outperforms rest of the UK
According to accountancy firm Grant Thornton, medium-sized enterprises in Merseyside and the North West have seen employment increase by 17,000, or 3.9%, in 2014: almost double the increase for the UK as a whole, which rose by only 2.1%.
Medium sized businesses are defined as those that employ between 50-499 people, with Grant Thornton’s report determining that businesses of this type now employ as many as 452,000 people in the North West.
However, the report also notes that firms are generally in “broad agreement” about a lack of skilled workers, with the North West amongst those regions to identify a shortage of skilled workers as a potential limiting factor to their growth in 2015.
Despite these growth inhibiting factors, the region performs relatively well, particularly in one area of innovation: the number of applications for “Research & Development” tax credits, which act as an incentive designed to stimulate extra spending of research.
In fact, after the South East, and London, the North West has the third highest amount of applications from any UK region.
The report claims to demonstrate that medium-sized enterprises drive the UK economic recovery, contributing £262 billion to the UK’s GDP in 2014.
Throughout 2014, medium-sized businesses have performed more strongly than smaller or larger enterprises, with reports of higher annual growth in capital investment, gross profits and salary.
While these enterprises have fared well in 2014, Grant Thornton’s report also shows a national slowdown in turnover in this market segment, down by 0.6% to £708 billion, with a decrease in productivity of 2.7%.
Managing partner of Grant Thornton in the North West, Carl Williams, said:
“It’s good to see the relative health and ambition of the regional economy reflected in these figures, which show once again how important the North West is to UK plc.
“Winning the talent battle is certainly one of the challenges of the upturn.
“There’s no doubt the mid-market is the engine room of the North West economy. The fact the data shows that across the UK this segment has seen a flattening in turnover and dip in productivity performance suggests more needs to be done to promote productivity and growth.”
Words: Peter Cribley