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Wider Birmingham SMEs show resilience

Business confidence is starting to return to SMEs in the wider Birmingham economy, according to research issued by the Marketing Birmingham Regional Observatory and the Greater Birmingham and Solihull LEP.

Almost 40% of businesses have increased their turnover in the last 12 months, while only 23% experienced a decrease and more than a quarter took on more staff over the same period.

Neil Rami, chief executive of Marketing Birmingham, which operates the Regional Observatory, said: “It has been said that SMEs are the lifeblood of the UK economy and a barometer for business conditions.

“If so, our findings indicate that the local business community could be looking more confidently to the future and are ready to explore opportunities to develop their operations. This is encouraging as where confidence exists, growth often follows.”

The research, which surveyed 1,700 businesses across the GBSLEP area and the Black Country, took place between December 2011 and March 2012, looking at SME growth and attitudes to future growth and employment.

Nearly half of SMEs in the region have not changed their staffing levels in the last three years, and just over half of respondents expected to increase their workforce over the next year.

Skills and training were identified by nearly a third of respondents as a key driver of growth with management, leadership, marketing, business development and IT topping the requirements of ambitious SMEs.

However, under half of those surveyed were planning to increase training in their organisation over the next year.

Alan Volkaerts, GBSLEP Board Member and operations director at Jaguar Land Rover’s Solihull Plant, commented: “Developing an innovative approach to tackling the issue of improving skills levels is one of the LEP’s key economic priorities.

“We have already launched the LEP Employment & Skills Board, which is a private sector led collaboration featuring companies, the public sector, education and training providers.

“It will act as a ‘Skills for Growth Hub’, developing and embedding long-term relationships that ensure skills training is in line with employer demand, young people have access to real world careers advice and that business links with schools is much improved.

“If we are to achieve our desire of making the Greater Birmingham and Solihull area globally competitive, we have to ensure the skills agenda is at the forefront of everything we do.”

The sectors with the highest number of high growth SMEs included manufacturing, engineering and business and financial services.

This reflects the region’s strengths and mirror those marketed internationally by inward investment programme, Business Birmingham, as areas of opportunity and growth in the wider Birmingham economy.

Those industries found to have struggled most with the effects of the downturn, included construction, retail, hospitality and tourism.

Mr Rami added: “SMEs in some of the region’s strongest sectors, including advanced manufacturing, engineering and business & financial services, benefit greatly from the supply chains of the major companies that have invested here.

“Jaguar Land Rover is but one example of a global investor that has brought local business significant growth opportunities.”

Chris Loughran, Senior Partner at Deloitte Midlands, commented on the findings: “SMEs across the GBSLEP and Black Country area are fighting hard to grow and boost employment, but are still restricted by a lack of available finance.

“As credit remains difficult to access, it is crucial for these businesses to watch their costs closely to maintain the right level of working capital, and identify the areas where investing that money will make a real difference to driving product demand – be it research and development, training the sales team or promoting the business to new customers. Investing can often ease the road to growth.”

This was posted in Bdaily's Members' News section by Tom Keighley .