As we move into the second half of the year, the growth we have seen in the economy so far in 2014 gives hope for North East businesses.
Yes, there are still challenges ahead and areas of uncertainty – such as the potential for an earlier-than-expected interest rate rise – but entrepreneurs in the region are upbeat.
If ever there was a time to lay to rest the ludicrous suggestion that the North East is the UK’s Detroit, it is now, and a survey of entrepreneurs shows exactly why.
There are more than 300 individual companies within the Entrepreneurs’ Forum, and these are the owner managed businesses which we know are the driving force of economic recovery, creating jobs and wealth in the region.
Our latest Business Tracker Survey results paint a positive picture of the economy, which reflects the instinctive feelings of many of us who have been in business for some time.
Covering the first quarter of 2014, the survey showed strength in many key indicators of the health of entrepreneurs’ own businesses, as well as the wider economy.
Looking at the year on year situation, the entrepreneurs reported increases in sales, profits employee numbers and remuneration. 73% told us overall sales were up, with 19% saying levels had remained the same.
More than 80% said export sales were holding or increasing, and actual profits were the same or higher than the previous year for 84%. More than 90% reported retained or increased levels of performance.
We also heard very good things about remuneration, prices and capital expenditure.
It isn’t only the very recent past which was positive, according to our members. Optimism for the future of their own businesses was increasing for more than 70%, and an overwhelming 98% were as confident, or more so, than they had been, in relation to the wider economy.
These are the people who run the businesses which drive the economy, and it is very heartening that both actual experiences and expectations suggest we have seen a strong first half of 2014, and that this will continue.
Forecasted performance for the second quarter of 2014, compared with the same three months in 2013, showed on balance that expectations were high for increases in overall sales (80% of entrepreneurs), export sales (54%), actual profit (69%), employee numbers (58%), prices (33%), capital expenditure (40%), and levels of stock (17%).
There are still challenges, however, with the ability to fill vacancies reported to have fallen slightly on the previous quarter’s survey, and finding quality staff continues to be seen as the main barrier to growth, being highlighted by 25% of entrepreneurs.
Finding sales and new contracts, red tape and access to funding also came up as issues which continue to be faced by members surveyed.
However, the overall picture painted by North East entrepreneurs is a good one, and we have good reason to push forward with optimism.
Detroit is a city known for its automotive industry and if there is a comparison to be drawn, it is merely that here in the North East we are motoring on, and driving forward, away from the recession and towards a positive future.
Nigel Mills is chairman of the Entrepreneurs’ Forum