LEP board member calls on Yorkshire business to start investing
Yorkshire firms must start investing, a member of the Leeds City Region LEP board says.
Steve Harris, who is also Lloyds Bank area director, has called on the region’s businesses to turn the air of optimism into investment and growth for 2014.
The LEP senior says businesses remain too cautious and called on many to consider their strategies.
Mr Harris said: “Confidence amongst our region’s businesses is unquestionably growing as we look to 2014.
“Supported by improving conditions in employment, the manufacturing and services sectors, and the broader economy.
“However, we are currently looking at a trend of around nine per cent growth in cash deposits on balance with us nationally, which shows that cash is still on balance sheets and not yet beginning to be invested.”
“Up until recently finance director and treasurers’ strategies were focused on conserving cash and managing expenditure in the downturn. Now they need to focus on expansion and preparing for growth to take advantage of recovery opportunities in 2014. That’s a big change for many.
“Working capital management is one obvious area. Yorkshire companies will need to concentrate on finding working capital enhancements that improve the long-term health of the company, and its competitiveness in the recovery.
“New and alternative forms of funding, such as supplier finance or invoice finance, can help businesses and firms in their wider supply chains to realise working capital benefits.”
Harris continued: “Exploring new, value accretive acquisitions will be another core focus. Yorkshire is home to a number of mid-market corporates operating in fragmented sub-sectors, which present the ideal opportunity to launch acquisitive growth strategies that increase their exposure to new geographical regions, product markets or vertical sectors.”
“What’s more funding conditions are favourable; there is positive appetite from banks, funders and equity sponsors to support company growth strategies and the underlying cost of funding remains comparatively low. The hurdle remains that of confidence with those businesses wanting to grow being sufficiently confident to take the initiative now.”