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Rising costs fail to
dampen North West SME growth plans
THE impact of rising costs is doing
little to dampen the growth aspirations of small and medium sized businesses
in the North West, according to new research by Yorkshire Bank.
The new survey by the Bank, conducted among 750 SME decision makers, reveals
that while small and medium sized businesses are experiencing rising costs,
the majority are rolling out expansion plans as faith in the UK economy
grows.
66% of SMEs said their costs had risen in the last 12 months, with raw
materials, staff salaries and utility and energy costs creating the most
concern. The perception of rising costs is most notable in the
manufacturing, food and drink, hospitality and legal sectors.
This perception could be more acutely felt following the Chancellor's Budget
in July when he announced the introduction of a living wage; an increase in
the national minimum wage for workers over 25. This increase, from £6.80 an
hour to £7.20 an hour, will come in to force in April next year. By 2020
this will rise to £9 an hour.
However, despite the challenges faced by smaller businesses as a result of
increased costs, 75% are expecting to invest in their business in the coming
year, with new equipment, premises and staff being top of the priority list.
39% believe their business' turnover will grow by an average of 12% in the
year ahead. 49% believe it will stay the same while 10% feel sales will dip.
This investment is being driven by confidence in the UK as a good place to
do business. 44% of businesses feel the North West economy is in a better
position today than before the recession, a belief which is potentially
acting as a buffer to the rising costs.
Simon Wright, Regional Director for Business and Private Banking at
Yorkshire Bank in the North West, said many businesses had used the
experience of the recession to reduce the impact of rising costs. He said:-
"Despite rising costs, the North West's small and medium sized
businesses are demonstrating they have the financial flexibility to weather
leaner periods and now have the appetite to grow.
We've spoken to hundreds of small businesses up and down the country and
found many are working hard to protect themselves from these rising costs,
but also extremely confident about the current state and future direction of
our economy. Through our bespoke lending
initiatives we're providing the flexibility they're looking for to enable
them to invest and expand where they see opportunities, whether that's to
create more jobs, purchase premises or enter new markets. As a result, we
are seeing small businesses innovating, creating new jobs and laying down
foundations for the future."
Earlier this year Yorkshire Bank became the first to partner with the
British Business Bank on its ENABLE Guarantee programme. Up to £125m of new
lending by Yorkshire Bank, will help more small businesses achieve their
growth ambitions.
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