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North West Business Survey Uncovers Confidence in Several Sectors
08/01/09  More than 3000 businesses from the region were polled in the North West Business Survey, with many responses coming from representatives of the city's leading professional sector firms. More than 50% of respondents acknowledged that the credit crunch was having a 'significant' or 'very significant' influence on their business strategy, but an impressive 46% said that it had not affected their ability to grow the business. 50% of respondents expected turnover/fee income to increase during the next 12 months, with only 30% expecting a decrease. More than half of all respondents from the accountancy, financial services and creative & media sectors also expected an increase in overall profitability. Trends related to employee numbers were also generally positive. Only 23% of total respondents had experienced a decrease in their workforce during the past 3 months and only 19% expected a decrease during the next quarter. However, deeper analysis did indicate that certain sectors were particularly vulnerable. For example, 67% of respondents providing outsourced and business support services had reduced staff numbers, as had 59% of firms operating in the legal sector. 83% of companies with between 200 and 499 employees anticipated a decrease in staff numbers during the next quarter. The survey also explored additional measures that businesses are taking to combat the downturn. Only 32% of firms admitted to increasing their fees during the past 3 months but 38% said they were intending to review their credit control procedures as a result of market conditions. This trend was most prevalent amongst the legal sector (54%) and least prevalent amongst financial services firms (36%). Results also indicated that smaller companies were the least likely to take this step. 63% of legal sector respondents said they would be amending their standard terms and conditions of trading, the highest response from all sectors; whilst 89% of accountants said they would not be making any changes. Again, smaller companies were the least likely to consider making changes to their core terms. When asked to highlight any issues which were a growing cause for concern, 61% of respondents selected cash flow. Closer analysis showed that this was chosen by 79% of those from the banking sector and 75% of those from the legal sector, who were also the most concerned over staff costs. The second most common cause of concern was interest rates, although many responses to the survey had been submitted prior to the 15 basis point cut. 55% of respondents said that the availability of commercial finance was currently the most important factor influencing the future success of their business, with larger organisations attaching the most importance to this issue. Those from the accountancy (53%), creative and media (47%) and legal (42%) sectors also said that the availability of suitably qualified staff was a key issue. Commenting on the results of the survey Chris Baguley, managing director of Bridging Finance Limited said: "It is clear from our results that current conditions are affecting different businesses in different ways. Whilst the general outlook is positive there is a degree of polarisation between different sectors over certain issues. For example, most of the responses we received from those in the property industry showed they are undergoing some fairly drastic adjustments in terms of their business operations and their expectations for the coming months. In contrast, accountants seem optimistic about the coming year and do not seem to be implementing any significant changes to their current practices. "Some businesses have been far more industrious than others in taking measures to combat the crunch and the legal sector sets a good example. Although our results suggested that the total number of people employed in this sector may have reduced slightly in recent months, turnover/fee income seems likely to remain fairly constant and many respondents from legal firms have indicated that they are streamlining their operations and maintaining their investments in training and development to ensure that performance is sustained. "Overall, I believe that the results of the survey support the opinions voiced by prominent figures like NWDA Chief Executive Steven Broomhead, who has suggested that the diversity of businesses in the region and its popularity with the professional services puts the North West in a strong position to weather the downturn." print page
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