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North: 2024 business survey

Embracing new opportunities

Businesses across the North are generally optimistic about the future. Most have shown resilience over the past few years, managing well with the various supply chain and energy cost challenges.

Debbie Mullen

Head of Mid Corporate, North, Barclays Corporate Banking

The bigger picture in the North

59% of those surveyed in the North West and 58% across the rest of the northern region are confident they’re able to grow their business.

93% of business leaders in the North East, 89% in Yorkshire and the Humber and 88% in the North West see developing staff skills to meet future needs as a top priority.

52% of businesses in Yorkshire and the Humber, 49% in the North East, and 48% in the North West say rising costs are their biggest challenge.

Our latest research, carried out in conjunction with News UK*, shows that almost six in ten business leaders across the North are confident in their abilities to grow their business. Similar numbers are looking to expand in the next twelve months (although this was slightly lower in the North East: 51% compared to 57% in the North West, and 59% in Yorkshire and the Humber).

According to businesses surveyed in the North East, the main reason for not expanding is a lack of access to finance -32%, considerably higher than the national average of 20%. Businesses in the North West also cited a lack of access to finance (19%) as a barrier, along with tough competition (19%). In Yorkshire and the Humber, internal operational challenges (34%) and tough competition (32%) appear to be the main reasons for not expanding.

In terms of general business challenges, an increase in costs is the most significant for approximately half of the businesses surveyed in the North, followed by recruitment and retention and economic instability. Despite this, across the North, the majority of businesses questioned say they’re either making headway with, or are meeting all their goals, in relation to developing their business more broadly through technological innovations or diversification. This percentage was highest in the North West (69%), similar in Yorkshire and the Humber (65%), and lowest in the North East (56%).

The North has a buoyant corporate finance market, with support and advice readily available for firms. We encourage businesses to speak to their financial provider to understand the range of funding options available to support them with their growth and expansion ambitions.

Debbie Mullen

Head of Mid Corporate, North, Barclays Corporate Banking

Recruitment and retention

With recruitment and retention being the main staffing issue for businesses across the North, it’s encouraging to see that developing staff skills to meet future needs is a top growth priority for business respondents in the North East (93%) and the North West (88%). While also a priority for business in Yorkshire and the Humber (89%), businesses there identified ‘embracing technology’ (90%) as their top growth priority. Given the importance of staff development to support recruitment and retention activities, it’s positive that the majority of businesses surveyed have programmes in place to upskill their staff (North East 76%, North West 76%, and Yorkshire and the Humber 70%).

Attracting talent continues to be a challenge, particularly for businesses based outside the larger cities such as Leeds and Manchester. To overcome this, many of our clients are linking up with schools and colleges to offer apprenticeships, which allow them to demonstrate their staff training and development programmes.

Debbie Mullen

Head of Mid Corporate, North, Barclays Corporate Banking

Embracing digital transformation in the North

90% of businesses surveyed in Yorkshire and the Humber, believe that embracing digital transformation is a top priority to grow their business.

87% of respondents in the North West, believe that embracing digital transformation is a top priority to grow their business.

82% surveyed in the North East believe that embracing digital transformation is a top priority to grow their business.

Digitisation can help businesses to streamline operations, boost efficiencies and maintain competitiveness in a rapidly evolving market. Six in ten business respondents across the North say they have already completed or are in the process of completing their digital transformation programmes.

Northern businesses surveyed are seeking to future-proof themselves through digital transformation in several ways. These include: remote working (Yorkshire and the Humber 71%, North East 70% and North West 62%), using data for smart decision making (North West 62%, Yorkshire and the Humber 58%, and North East 33%), and using digital tools to improve customer service (North West 66%, North East 63%, and Yorkshire and the Humber 46%). More than half of the businesses in Yorkshire and the Humber are also using automation (56%), and 52% in the North East highlight social media as key (52%).

Artificial Intelligence

Artificial intelligence (AI) is widely anticipated to increasingly influence business operations in the future. However, according to our research, not everyone has started using it as a tool.

Approximately a quarter of businesses questioned in the North say that the main barriers to its use are employee skills gaps. Businesses in the North East also identify limited use cases (27%) and not understanding AI’s benefits (24%) as reasons for not yet embracing it. In the North West, 23% of businesses don’t view AI as a priority at the moment. And in Yorkshire and the Humber, another identified barrier is regulatory issues (23%).

Many of our clients have spoken about the opportunities they’ve capitalised on from introducing AI. Aside from creating more efficiencies, this technology can provide data for businesses to use to develop new products for their customers. With AI’s capabilities and influence growing across many sectors, businesses may want to take the time to evaluate how they could use it to bolster their growth strategies, if not already doing so..

Debbie Mullen

Head of Mid Corporate, North, Barclays Corporate Banking

The sustainability journey in the North

Our survey highlighted a disparity across the Northern region regarding business leaders’ familiarity and awareness of Environmental, Social and Governance (ESG) as a business topic. ESG is a framework that helps businesses understand and measure their impact on society, the environment and how transparent and accountable it is. Those in Yorkshire and the Humber were the most familiar – or at least had some awareness of it – (74%), followed by the North West (69%). Business respondents in the North East appear to be less aware of ESG than elsewhere (58%, compared to the national (excluding London) average of 72%). In fact, 29% of business leaders in the North East say they’ve never heard of ESG – a higher proportion than the UK average of 22%.

Of those respondents who are aware of ESG, 31% of businesses in the North West say they have a well-established ESG approach in place (compared to 23% in the North East, and 20% in Yorkshire and the Humber). Others have started implementing their ESG approach (North East 23%, North West 23%, and Yorkshire and the Humber 35%).

Business leaders questioned identify waste reduction as the area of sustainability that they’re most likely to invest in over the next two years (North East 80%, North West 75%, and Yorkshire and the Humber 65%).

According to our survey respondents, thinking about ESG and sustainability, the barriers that have stopped businesses from investing in actions to improve sustainability further are a lack of clear return on investment (for example, 29% of businesses in the North East), difficulty measuring the impact of ESG activity (28% of business in the North West), and a lack of funds to invest (26% in Yorkshire and the Humber).

Despite these barriers, businesses shouldn’t ignore ESG and the ways in which they could incorporate it across their organisations. Debbie explains: “We’ve seen greater collaboration across the supply chains, as businesses align their ESG agenda with that of their suppliers and customers. This has helped strengthen those relationships and provide security and confidence.”

What we’re seeing is that while many businesses are in fact doing ESG-related activities, they don’t always label them as such, or they’re not 100% sure what it means. So perhaps some of these results reflect different interpretations of, or less familiarity with, the term ‘ESG’, particularly within smaller and medium-sized businesses. Yorkshire and the Humber has a lot of wind turbine and innovative hydrogen projects, so businesses in that region may be more familiar with ESG.

Debbie Mullen

Head of Mid Corporate, North, Barclays Corporate Banking

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*Source: YouGov ‘News UK Barclays Survey’ April 2024. An online quantitative survey of 1000 business leaders working in businesses with at least 250 employees. Working in all regions of the UK except London. NB Survey size in Northern Ireland 15 businesses.

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