Business barometer shows drop for North East growth
The Business Growth Fund’s Barometer has shown a drop in growth levels for North East businesses.
According to the latest Experian research, commissioned by BGF, 15.8% of mid-sized SMEs in the region are demonstrating high levels of growth across the country.
This equates to 80 high growth companies in the region compared with 88 at this point last year, a drop of 0.5%.
These results compare against 4,353 high growth companies across the UK as a whole, these companies have all demonstrated aggregate growth of at least 33% over the past three years.
The BGF Growth Companies Barometer shows that the overall population of North East companies with a turnover of £2.5m - £100m numbers 505.
According to the research there are approximately 24,955 companies with this turnover in the UK as a whole.
Of the UK high growth companies identified, those with turnovers of between £2.5m - £10m continue to perform most strongly.
51% of the high growth segment, or 2,202 companies overall , had turnovers of less than £10m.
Since this Barometer was published last year, the picture is one of overall growth increase, albeit at a gentle level.
The Barometer shows a higher incidence of high growth companies in almost all regions of the UK. and almost all industry sectors showed some increase in the proportion of their high growth small and medium sized companies.
Business services companies continue to be the best represented among the high growth segment, with 1,095 companies making up 25% of the group.
20% of the high growth segment, equating to 859 companies, is represented by Manufacturing; and Retail occupies 11%, with 478 high growth companies identified.
Andy Gregory, Regional Director for BGF in the North of England said: “This data is encouraging.
“It shows that despite all the wider challenges posed by the macro-economic climate, good businesses are prospering in the North East and across the UK as a whole.
“However, for real economic recovery, we need these growth figures to be higher and more broadly based.
“We need to see heightened levels of ambition and investment among business owners.
“One of the first questions that I ask an entrepreneur is whether they have really accomplished all that that they hoped for when they started their business?
“What could a robust, properly financed business plan achieve over the next three, five or ten years? Could the business double its workforce or treble turnover?
“Could it expand out of its home region through organic or acquisitive growth and develop a national or international footprint? Could it develop its supply chain, launch new products and increase exports to new overseas markets?
“Growth comes in many different forms and so does the means to fund it.
“For many businesses equity finance is an option that should be seriously considered. Working capital should be funded by debt, longer-term investment by capital or equity. We need more well capitalised businesses actively planning for long-term success.
“Not enough growth capital is currently being channeled into UK SMEs. Considering the possible universe of good businesses seeking finance to support growth, this is a missed opportunity.
“This is something that we at BGF are seeking to tackle with up to £2.5bn of growth capital available for small and medium sized businesses with ambition to invest.
“But we also need fundamental cultural change. Aspiration and ambition is critical to growth. We should make no apology for it, and we need to create a culture where it is applauded and supported.
“Finding effective ways to work with the major banks, as well as alternative lenders, is going to be a crucial factor in driving economic recovery.”
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