yorkshire and humber nbs report

1

The National Business SurveyYorkshire and Humber Report – November 2009 Results

2

Executive Summary

The November 2009 wave of the National Business Survey (NBS) shows an upward trend in business performance compared to the previous wave

– 22% of businesses in the region reported an improved business performance in the past 12 months, compared to only 15% in June 2009

Improved business performance is reflected in increased orders, output and profit margins

The future is also looking more optimistic with 29% of businesses expecting an improvement in their business climate

– Transport, manufacturing and financial/business services firm are the most optimistic in the region, with around two fifths of these firm expecting higher domestic orders in the next 12 months

However, while firms seem to be more optimistic in general, they are vulnerable should there be any further downturn – with a third (30%) citing that they are not well place to weather a downturn

– This is less likely to be felt by larger companies, who are more likely to have reserves in place to help them cope

Companies are still feeling the pressure from customers to reduce their prices (62%) and are experiencing a higher level of price competition (60%).

– This is felt more acutely in the construction sector and it is unsurprising that this sector is most likely to experience delayed payments from customers

3

Executive Summary

It is encouraging to see more businesses pursuing new markets/customers in November 2009 (68%) compared to only 51% of businesses in June, although more businesses have also had to reduce staff and delay payments in order to survive

Investment is still low in the region – although this is unsurprising given that many businesses are working hard to merely survive

A fifth of firms expect to raise new sources or renegotiate existing forms of finance or credit

– There is a clear link between those business who feel less able to weather any downturn and those who expect to access finance

Businesses are increasingly reluctant to pass on any increased costs to customers perhaps highlighting the difficulties of attracting and retaining customers

4

Contents

Background and methodology

Section 1 - Headline Business Performance

Section 2 - Performance and outlook across key business metrics

Section 3 – Are market conditions improving?

Section 4 – Are businesses still taking action to combat the downturn?

Section 5 – Is business investment improving?

Section 6 - Access to finance and credit

Section 7 - Business cost pressures

Section 8 - Business strategies

Section 9 - Business collaboration and support

Section 10 - Human resources and training

Appendix A – Additional charts of interest

Appendix B - Guide to statistical reliability

5

Introduction

6

Background and objectives

This report is based on findings from the National Business Survey (NBS), November 2009, conducted by Ipsos MORI on behalf of the Regional Development Agency Network and Invest Northern Ireland.

The National Business Survey is one of the largest and most statistically robust of its kind carried out in England and Northern Ireland with over 5,300 companies responding from all sectors of the economy. Respondents are senior business leaders within their organisation.

The survey is carried out twice a year (spring and autumn) with the latest findings covering opinion for the months October – December 2009. The survey asks a variety of questions ranging from business optimism to orders and output, skills issues, cost pressures and environmental performance.

The survey builds on the findings and work of the survey carried out in June 2008, November 2008, June 2009 and of the previously titled “UK Survey of Regional Economic Trends”, which ran over nine consecutive waves, from spring 2003.

7

Methodology

The methodology and questionnaire remain largely unchanged to ensure consistency of approach between survey waves and data.

The National Business Survey uses a postal methodology, with the option of completing the survey online for those who find this more convenient.

An initial mail-out was sent out to a randomly selected, representative sample of businesses and organisations across the country. Following this email reminders were sent to all organisations with email contact details.

Fieldwork was conducted between October and December 2010 and the final achieved sample size was 5,313. The table on the next slide shows how responses were broken down by each region.

Data have been weighted by size (employee numbers), region and sector, to reflect the national profile.

8

Sampling

RegionSample Size

November 2009

Sample Size

June 2009

Sample Size

November 2008

Sample Size

June 2008

Yorkshire and Humber 925 1,215 843 1,144

West Midlands 432 616 327 319

South West 437 558 425 454

South East 683 957 569 657

North West 438 620 538 357

North East 351 431 343 307

London 420 552 505 414

East Midlands 805 938 738 735

East of England 449 529 380 410

England 4,940 6,416 4,668 4,797

Northern Ireland 373 411 335 438

TOTAL (England and Northern Ireland)

5,313 6,827 5,003 5,235

9

Publication of data and acknowledgements

Publication of the Data

– As with all our studies, these findings are subject to our standard Terms & Conditions of Contract. Any press release or publication of the findings of this survey requires the advance approval of Ipsos MORI. This would only be refused on the grounds of inaccuracy or misrepresentation of the findings.

Acknowledgements

– We would like to place on record our thanks for the input and support provided during the study from Victoria Gell, Bethan Sheridan-Jones, and Patrick Bowes at Yorkshire Forward, as well as Ian Kay at the Office for National Statistics. We would also like to thank all businesses who took the time to take part in the survey.

10

Findings from the National Business Survey

November 2009

11

Section 1

Headline Business Performance

12

22%

32%

46%

Business performance in Yorkshire and Humber is improving

Improved

Deteriorated

Remained stable

Q Would you say that overall, your business performance in the past 12 months has improved, remained stable or deteriorated?

Base: All businesses in Yorkshire and Humber answering (922)

In line with positive national trends, a higher proportion of firms in Yorkshire and Humber reported that their business performance has improved compared to June 2009. Less than half (46%) of businesses in Yorkshire and Humber (47% in England) report that their business performance has deteriorated over the past 12 months, and almost a

quarter (22%) say that it has improved (20% in England), a 7% point increase compared to June 2009.

June 2009: 15%

June 2009: 30%

June 2009: 55%

13

27%

25%

22%

21%

19%

13%

38%

33%

45%

26%

29%

29%

28%

36%

33%

40%

29%

52%

50%

53%

59%

53%

29%

12%

Public/personal services (91*)

Hotels/catering (45*)

Primary (27*)

Manufacturing (163)

Financial/Business Services (247)

Retail and Distribution (217)

Construction (83*)

Transport/storage/comms (47*)

Improved Remained stable Deteriorated

Primary sector businesses have experienced the most positive upturn in performance; 25% reported that their businesses performance has improved, an increase of 21 % points compared to June 2009. Just under three in ten Public/personal service (29%) and

Hotels/catering businesses (27%) report improvements. The only sector where fewer firms report improved performance compared to June 2009 is in Transport/storage/comms. While there are an increased number of businesses in this sector reporting stable

performance compared to six months ago, the full effect of any upturn is yet to really impact on this sector.

Base: All businesses in Yorkshire answering (shown in brackets) *Caution: small base size (<100)


%improve: diff to June

2009

Business performance by sector remains mixed; firms in the primary and hotels/catering sectors have seen greatest improvements in performance over the period

2%

19%

21%

7%

5%

2%

8%

-6%

14

20%

29%

32%

34%

26%

32%

47%

46%

35%

1-9 (637)

10-49 (209)

50+ (74*)

Improved Remained stable Deteriorated

Better economic conditions are clearly having a positive impact on the performance of smaller firms. Business performance of larger firms has stabilised over the last six months

Base: All businesses in Yorkshire and Humber answering (shown in brackets) *Caution: small base size (<100)


One in five (20%) 1-9 employee firms and 29% of 10-49 businesses in Yorkshire have reported performance improvements in the last 12 months, an increase of 6 % points and 13 % points respectively since June 2009. This

rate of increase is significantly higher than the national average. While fewer 50+ firms report improved performance compared to June 2009, conditions appear to be stabilising and greater numbers now report stable performance.

Smaller firms are clearly more sensitive to changing economic conditions, falling harder in the downturn but conversely experiencing a quicker recovery.


2009

+6%

+13%

-8%

15

12%

8%

20%

29%

39%

36%

48%

47%

49%

56%

32%

24%

June 2008 (1,117)

November 2008 (827)

June 2009 (1,187)

November 2009 (911)

Improve Remain stable Deteriorate

The upward trend is expected to continue with businesses feeling more optimistic now about the future business climate.

Q Over the next 12 months do you expect the business climate in which your business operates to generally improve, remain stable, or deteriorate?

Businesses in the region continue to feel optimistic about the next 12 months, with just under three in ten (29%) businesses expecting their business climate to improve, an increase of 9 % points compared to June 2009. Just

under a quarter (24%) expect their business climate to deteriorate in 2010, in line with the national results.

Base: All businesses in Yorkshire and Humber answering (shown in brackets)

16

40%

38%

37%

29%

24%

23%

23%

16%

31%

38%

42%

46%

50%

50%

46%

71%

28%

24%

22%

25%

26%

27%

30%

13%


Manufacturing (163)

Financial/Business services (247)



Construction (83*)

Hotels /catering (45*)

Primary (27*)


Transport/storage/comms sector is most optimistic about the business climate in the next 12 months, while the primary sector expects stable conditions

The Transport/storage/comms sector is most optimistic about the development of their business climate in the next 12 months with 40% expecting an improvement. The majority of businesses (71%) in the Primary sector expect

stable conditions over the next 12 months, while only 16% expect improvements.




2009

20%

20%

13%

8%

4%

11%

4%

1%

17

28%

35%

22%

49%

41%

37%

22%

25%

41%

1-9 (629)

10-49 (207)

50+ (73*)


Confidence is growing among small and medium businesses, while larger businesses remain pessimistic about the next 12 months



Small and medium sized businesses feel more optimistic about the next 12 months than 6 months ago with 28% expecting their business climate to improve, 35% respectively. Four in ten (41%) large businesses feel pessimistic about the future, while under a quarter (22%) expect improvements, a drop of 3% points compared to June 2009.


2009

+10%

+9%

-3%

18

10%

59%

21%

9%

1%

The majority of businesses feel well placed to weather any economic downturn in the next 12 months

Q How well placed is your business to weather any downturn in economic conditions over the next 12 months?

Over two thirds (69%) of businesses feel their business is well placed to weather any downturn in economic conditions over the next 12 months, a slight decrease since June 2009 (71%). The Hotels/catering industry feels least well placed with just under a quarter (23%) saying they are not at all well placed, while almost four in five (79%) businesses in the

Public/personal services sector feel well placed.

Very well placed

Not very well

placed

Fairly well placed

Not at all well placed

N/A Very well

Fairly well

Not very well

Not at all well

Manufacturing (162) 15% 60% 16% 8%

Primary (28*) 13% 57% 19% 8%


13% 54% 22% 11%


13% 66% 14% 6%

Financial and Business Services (243)

11% 60% 24% 5%


8% 62% 18% 11%

Construction (80*) 6% 47% 32% 13%

Hotels/catering (43*) 3% 49% 25% 23%

Base: All businesses in Yorkshire and Humber answering (908) *Caution: small base size (<100)

19

8%

18%

20%

58%

63%

66%

23%

13%

10%

6%

3%

1%

7% 3%

1-9 (632)

10-49 (209)

50+ (74*)

Very well placed Fairly well placed Not very well placed Not at all well placed N/A

Despite slightly improved conditions, businesses in Yorkshire and Humber do not feel significantly better placed to weather any downturn compared to June


Q How well placed is your business to weather any downturn in economic conditions over the next 12 months?

Small businesses feel only slightly better placed to weather any downturn than in June 2009 – 66% state they feel well placed, compared to 69% in June. Despite being most pessimistic about their future business climate, large

businesses feel most confident, with only 10% stating that they don’t feel well placed.

% improve: diff to June

2009

-3%

+4%

-1%

20

The trend of the BCC Quarterly Economic Survey confirms the results of the NBS, showing a steep increase in confidence in turnover and profitability

-50

-40

-30

-20

-10

0

10

20

30

40

50

60

Q1

02

Q3

02

Q1

03

Q3

03

Q1

04

Q3

04

Q1

05

Q3

05

Q1

06

Q3

06

Q1

07

Q3

07

Q1

08

Q3

08

Q1

09

Q3

09

Turnover - Manufacturing Turnover - Service

Profitability - Manufacturing Profitability - Service

Source: BCC Quarterly Economic Survey (UK)

Confidence, by turnover and profitability, within manufacturing and servicing sectors

21

The CBI Quarterly Industrial Trends Survey shows a similar trend to the NBS – business confidence has improved in January 2009, and now has a positive balance overall

Balance is a percentage difference between negative and positive responses

Source: CBI Quarterly Industry Trends Survey (UK)

-10

16

-13-18

-23

-40

-60-64

-40

-16

10

-2-7

-2

-14

-6

-70

-60

-50

-40

-30

-20

-10

0

10

20

Jan-0

6

Apr

Jul

Oct

Jan-0

7

Apr

Jul

Oct

Jan-0

8

Apr

Jul

Oct

Jan-0

9

Apr

Jul

Oct

22

Section 2

Performance and outlook across key business metrics

23

23%

8%

15%

27%

42%

15%

22%

6%

13%

25%

36%

46%

12%14%14%

6% 7%

15%

24%

30%

8%10%

17%

7%

12%

21% 20%

31%

10%14%

DomesticOrders

ExportOrders

NumbersEmployed

Volume ofoutput

Pricescharged tocustomers

Staff costs Profitmargins

Cash in thebusiness

(cash flow)

Jun 2008 Nov 2008 Jun 2009 Nov 2009

In line with national trends, business performance in Yorkshire has started to improve slightly in November. Higher proportions of businesses reported increased volumes of output, domestic orders, cash flow and numbers employed.

Q Excluding seasonal variations, what has been the trend during the past 12 months with regard to…

Domestic orders, export orders, numbers employed and volume of output have all increased in November. This upward trend is reflected in higher staff costs, higher profit margins and increased cash flow. Prices charged to

customers are reported to have decreased.

% higher

Base: All businesses in Yorkshire and Humber answering

24

-26%

-45%-50%

-25%-28%

-39%-33%

-7%-13%

-40%

-49%

-27%

-5%

-25%

-35%

-6%

Primary Manufacturing Construction DistributionHotels/catering

Transport/storage/comms

Financial/BusinessServices

Public/personalservices

Jun 2009 Nov 2009

Q Excluding seasonal variations, what has been the trend during the past 12 months with regard to… Domestic orders

The Hotels/catering sector experienced the greatest improvement over the past 6 months with regard to domestic orders, the negative %net higher shrinking to -5% compared to -28% in June. The Primary sector and the Transport/storage/comms sector also reported significant improvements (-13% and -25% respectively). Businesses in the Retail/distribution and Financial/business services sectors

were the only sectors that experienced a decrease in domestic orders.

% net higher

Base: All businesses in Yorkshire and Humber answering (June 2009 - 1,157, November 2009 - 870)

Most sectors reported an increase in domestic orders in November, most notably in the Hotels/catering and Primary sectors. The Public/personal services industry remained stable, while the Retail/distribution and Financial/business Services sectors continue to struggle in the economic downturn

25

-60% -63%-68%

-53%

-69%

-54%-48% -47%

-41%

-57%

-69%

-50% -53%-57%

-44%-38%

Primary Manufacturing ConstructionRetail andDistribution Hotels/catering




Jun 2009 Nov 2009

Q Excluding seasonal variations, what has been the trend during the past 12 months with regard to… Profit margins

Most businesses reported an increase in profit margins, with the net higher score for the Primary sector improving from -60% to -41% in November. Businesses operating in the Construction sector (-69%) or the

Transport/storage/comms industry (-57%) reported a slight decrease in profit margins.

% net higher

Base: All businesses in Yorkshire and Humber answering (June 2008 – 1,187; Nov 2009 - 903)

As a result of increased orders, profit margins have also started to improve across most sectors

26

19%

8%

14%

24%

46%

16%15%

6%9%

20%

31%

38%

12%

17%18%

7%9%

24%27%

30%

13%17%

27%

11%14%

31%35%

18%22%

27%

DomesticOrders

ExportOrders

NumbersEmployed

Volume ofoutput

Pricescharged tocustomers

Staff costs Profitmargins

Cash in thebusiness

(cash flow)

Jun 2008 Nov 2008 Jun 2009 Nov 2009

Businesses in Yorkshire feel considerably more optimistic about the next 12 months with over a quarter expecting higher domestic orders and almost a third expecting an increase in outputs.

Expectations across almost all metrics have increased since June; over a quarter (27%) expect an increase in domestic orders, just under a third (31%) higher volume of output. The proportion of businesses expecting an

increase in staff employed rose to 14%, 35% expect an increase in staff costs. 22% expect an increase in their cash flow, 18% in profit margins.

% higher


Q Excluding seasonal variations, what are the expected trends for the next 12 months with regard to…

27

12%

-8%

-27%

-9%-14% -13%

-7%-2%

-12%

18%

0%3% 4%

14%17%

9%

Primary Manufacturing ConstructionRetail andDistribution

Hotels/catering




Jun 2009 Nov 2009

Q Excluding seasonal variations, what are the expected trends for the next 12 months with regard to… Domestic orders

Most sectors expect an improvement in domestic order levels with the balance turning positive for the majority of sectors. The Manufacturing and Financial/business services sectors are most optimistic about domestic orders in the

next 12 months with net higher scores of 18% and 17% respectively. Construction also showed a considerable improvement with even proportions expecting higher and lower domestic orders.

% net higher

Base: All businesses in Yorkshire and Humber answering (Jun 2009 – 1,093; Nov 2009 - 822)

The majority of sectors expect strong improvements in domestic orders, with most reporting positive net higher scores

28

-40%-36%

-47%

-32%

-59%

-48%

-27% -26%

-35%

-8%

-28% -26%

-41%

-17%

-4%

-15%

Primary Manufacturing ConstructionRetail andDistribution

Hotels/catering




Jun 2009 Nov 2009

Q Excluding seasonal variations, what are the expected trends for the next 12 months with regard to… Profit margins

All sectors expect small improvements in their profit margins in the next year; the Transport/storage/comms sector is most optimistic with net higher scores improving to -17% (compared to -48% in wave 3). The Hotels/catering sector remains most pessimistic in November with a net higher score of -41%, still, a significant improvement since June.

% net higher

Base: All businesses in Yorkshire and Humber answering (Jun 2009 – 1,121; Nov 2009 - 841)

All sectors expect improvements in profit margins over the next 12 months, although the balance remains negative

29

Results from the British Chamber of Commerce (BCC) support the trends of the NBS, reporting a strong increase in business performance

-55

-45

-35

-25

-15

-5

5

15

25

35

Q1

02

Q3

02

Q1

03

Q3

03

Q1

04

Q3

04

Q1

05

Q3

05

Q1

06

Q3

06

Q1

07

Q3

07

Q1

08

Q3

08

Q1

09

Q3

09

Home Sales - Manufacturing

Home Sales - Service

Home Orders - Manufacturing

Home Orders - Service


Sales, by home sales and orders, within manufacturing and servicing sectors

30

The BCC survey reports an increase in export orders and sales for Manufacturing and Services businesses, confirming the findings of the NBS

-55

-45

-35

-25

-15

-5

5

15

25

35

Q1

02

Q3

02

Q1

03

Q3

03

Q1

04

Q3

04

Q1

05

Q3

05

Q1

06

Q3

06

Q1

07

Q3

07

Q1

08

Q3

08

Q1

09

Q3

09

Export Sales - Manufacturing

Export Sales - Service

Export Orders - Manufacturing

Export Orders - Service


Sales, by export sales and orders, within manufacturing and servicing sectors

31

The BCC survey confirms that the unemployment rate peaked in Q2 and has now started to shrink with steep improvements in both the Manufacturing and Service sectors

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

Q1

02

Q3

02

Q1

03

Q3

03

Q1

04

Q3

04

Q1

05

Q3

05

Q1

06

Q3

06

Q1

07

Q3

07

Q1

08

Q3

08

Q1

09

Q3

09

Employment in last 3 months - Manufacturing

Employment in last 3 months - Service


Employment in the ‘last 3 months’, within manufacturing and servicing sectors

32

Section 3

Are market conditions improving?

33

62%

60%

50%

25%

25%

8%

14%

Pressure to reduce prices from your customers

A higher level of price competition in your market

Delayed payments from your customers

More stringent controls and requirements from yourbusiness bank

Employees are more willing to accept salaryreductions / pay freezes

An increased level of support and assistance fromyour business bank

None

In line with national trends, businesses continue to feel pressure to reduce prices from customers and experience strong price competition

Q As a direct result of current economic conditions, has your business experienced any of the following in the past 12 months?

Over 3 in 5 businesses (62%) experienced pressure to reduce prices from their customers, fairly in line with national results (60%) and an increase from 56% in June. Price competition in the market is also felt to remain strong (60% experienced higher levels of competition), especially in the Construction (84%) and Hotels/catering (74%) sectors.

Base: All businesses in Yorkshire and Humber answering (893), all in England answering (4,831)

60%

England

61%

52%

26%

30%

7%

11%

34

89%

75%

73%

65%

61%

59%

49%

46%

Construction (82*)


Manufacturing (162)




Primary (26*)


The Construction, Transport/storage/comms and Manufacturing sectors are most likely to report high pressure to reduce prices from customers

Q As a direct result of current economic conditions, has your business experienced any of the following in the past 12 months? Pressure to reduce prices from customers

Construction businesses are most affected by pressure from customers to reduce their prices (89%), followed by the Transport/storage/comms (75%) and Manufacturing (73%) sectors.


35

44%

60%

72%

78%

Very wellplaced (100)

Fairly wellplaced (529)

Not very wellplaced (177)

Not at all wellplaced (71*)

Price pressure from customers is a greater issue for businesses struggling to cope with the economic downturn

Q As a direct result of current economic conditions, has your business experienced any of the following in the past 12 months? Pressure to reduce prices from customers

Those businesses who saw their business performance deteriorate over the past 12 months and do not feel well placed to weather the downturn are also more likely to feel the pressure to reduce prices

from customers.


Business performance over the past 12 months Weathering the downturn

46%

55%

75%

Improved(188)

Remainedstable (264)

Deteriorated(440)

36

37%

31%

30%

26%

25%

22%

19%

10%

Manufacturing (162)



Construction (82*)




Primary (26*)

Employees in Manufacturing, Financial/business services and Transport/storage/comms are most likely to be willing to accept pay reductions or freezes

Manufacturing businesses experienced the greatest cooperation from employees with 37% reporting that their employees are willing to accept salary reductions or pay freezes. The Retail/distribution and Primary sectors are

least likely to have experienced this willingness among their employees (19% and 10% respectively).


Q As a direct result of current economic conditions, has your business experienced any of the following in the past 12 months? Employees are willing to accept salary reductions/pay freezes

37

21%

18%

32%

Improved(188)

Remainedstable (264)

Deteriorated(440)

Salary reductions/pay freezes are more likely to affect businesses whose business performance has deteriorated over the past 12 months

Q As a direct result of current economic conditions, has your business experienced any of the following in the past 12 months? Employees are willing to accept salary reductions/pay freezes


21%

25%

23%

28%

Very well placed (100)

Fairly well placed (529)

Not very well placed(177)

Not at all well placed(71*)

Business performance over the past 12 months Weathering the downturn

Understandably, employees of firms whose business performance has deteriorated over the past 12 months are more willing to accept pay cuts and freezes (32%), than staff in companies with stable (18%) or improved

performance (21%).

38

Section 4

Are businesses still taking action to combat the downturn?

39

51%

30%

34%

29%

25%

12%

8%

5%

3%

68%

38%

36%

34%

29%

13%

9%

6%

3%

Pursue new markets / customers

Delay payments to your suppliers

Reduce the number of staff

Reduce the working hours of staff

Consolidate / reduce the number of you suppliers

Cut salaries of staff

Offer unpaid leave to staff

Close all or part of the business

Sell all or part of the business

Jun 2009 Nov 2009

Businesses in the region continued to fight the downturn by introducing a range of measures, most pursued new markets/customers

Proportions of businesses who introduced measures as a result of the current economic climate increased or stayed the same across all metrics compared to June. Seven in ten (68%) opened their businesses to new markets or

customers, while 38% had to delay payments to suppliers. A minority had to close (6%) or sell (3%) all or part of the business.

Base: All businesses in Yorkshire and Humber answering (Jun 2009 – 1,120 ; Nov 2009 - 759)

Q As a direct result of the current economic conditions, which of the following actions has your business undertaken in the past 12 months?

40

68%

38%

36%

34%

29%

13%

9%

6%

3%

74%

26%

18%

21%

22%

9%

7%

9%

10%

Pursue new markets / customers

Delay payments to your suppliers


Reduce the working hours of staff

Consolidate / reduce the number of you suppliers

Cut salaries of staff

Offer unpaid leave to staff

Close all or part of the business

Sell all or part of the business

% Undertaken % Expect to undertake

So far businesses have undertaken a range of different measures to combat the downturn, but few plan to undertake further measures

In line with national results, over two thirds (68%) of businesses pursued new markets or customers in the past 12 months and even more (74%) plan to do so in the next 12 months. Around one in ten are considering closing or

selling all or part of the business (9% and 10%) in the next 12 months.

Base: All businesses in Yorkshire and Humber answering (undertaken – 759, expect to undertake – 682)

Q As a direct result of the current economic conditions, which of the following actions has your business undertaken in the past 12 months / does your business expect to undertake in the next 12 months?

41

50%

47%

46%

42%

38%

32%

27%

24%

18%

21%

17%

12%

14%

16%

34%

18%

Construction

Hotels/catering

Manufacturing

Transport/storage/commsFinancial/Business

Services

Retail and Distribution

Primary

Public/personal services


The Construction sector was most affected by staff reductions, but is expected to consolidate in the next 12 months. Primary sector businesses are more pessimistic with a third expecting to reduce staff in the next year

The Construction sector is most likely to have had to reduce the number of staff in the past 12 months with 50% reporting they had to do so, however, the future is looking more promising with only 18% expecting to reduce staff in the next year. Just over a quarter of

businesses in the Primary sector (27%) had to reduce staff in the past year, but over a third expect to do so in the next year (34%).


Q As a direct result of the current economic conditions, which of the following actions has you business undertaken in the past 12 months / does your business expect to undertake in the next 12 months? Reduce the number of staff

(69*)(61*)

(39*)(34*)

(146)(126)

(39*)(37*)

(194)(181)

(183)(162)

(20*)(19*)

(67*)(60*)

42

76%

72%

71%

70%

68%

61%

60%

57%

71%

88%

77%

75%

70%

68%

56%

64%

Primary



Manufacturing



Hotels/ catering

Construction


Firms in the Primary sector are most likely to have pursued new markets in the past 12 months, but Public/personal services companies are most likely to consider this option in the next 12 months

Businesses in the Primary, Public/personal services and Financial/business services sectors were most likely to report that they had pursued new markets or customers in the past year. Slightly higher proportions expect to undertake this measure in the next year across most sectors. Almost nine in ten (88%) of Public/personal services firms plan to pursue new markets in

the next year.


Q As a direct result of the current economic conditions, which of the following actions has your business undertaken in the past 12 months / does your business expect to undertake in the next 12 months? Pursue new markets/customers

(20*)(19*)

(67*)(60*)

(194)(181)

(146)(126)

(183)(162)

(39*)(37*)

(39*)(34*)

(69*)(61*)

43

82%

14%

27%

27%

19%

69%

32%

32%

33%

29%

69%

52%

41%

32%

26%

53%

62%

53%

49%

35%

Pursue new markets /customers

Delay payments to yoursuppliers


Reduce the working hoursof staff

Consolidate / reduce thenumber of you suppliers

Very well placed Fairly well placed Not very well placed Not at all well placed

Businesses who feel very well placed to weather the economic downturn are most likely to have pursued new markets or customers over the past 12 months

Businesses who currently feel not at all well placed to weather the current downturn are likely to have undertaken a range of different measures in the past 12 months. 82% of businesses who say they feel very well placed pursued

new markets or customers in the past year to strengthen their position. Base: All businesses in Yorkshire and Humber answering (Very well placed – 72; Fairly well placed – 446; Not very well placed – 166; Not at all well placed – 65)

Q As a direct result of the current economic conditions, which of the following actions has your business undertaken in the past 12 months?

44

Section 5

Is business investment improving?

45

18%

41%

34%

7%

Expectations with regard to overall investment are slightly more positive with most expecting higher or stable levels of investment

Q Excluding seasonal variations, what has been the trend during the past 12 months, and what are the expected trends for the next 12 months, with regard to overall investment?

Base: All businesses in Yorkshire and Humber answering (Past 12 months – 884, Next 12 months – 836)

Investment levels of two in five (41%) businesses have remained stable over the past 12 months and a similar proportion expects them to remain the same over the next 12 months (44%). Only a small proportion (18%) have experienced higher levels of investments in the past year, but just under a quarter (23%) expect

them to increase for the next 12 months.

23%

44%

26%

7%

Higher

Same

Lower

Not applicable

Past 12 months Next 12 months

46

23%

25%

44%

40%

26%

28% 7%

7%Yorkshire and Humber

England

Higher Same Lower Not applicable

Businesses in the region are slightly more likely to expect their overall levels of investment to remain stable

Results in Yorkshire and Humber are fairly in line with national findings, with a slightly higher proportion (44% vs. 40% in England) expecting their overall levels of investment to remain the same, while slightly smaller proportions expect higher (23% vs. 25% in England) or lower (26% vs. 28% in

England) levels of investment.

Base: All businesses in Yorkshire and Humber answering (836; England - 4410)

Q Excluding seasonal variations, what are the expected trends for the next 12 months, with regard to overall investment?

47

47%

17%

9%

41%

53%

28%

7%

23%

52%

7%

10%

5%Improve (258)

Remain Stable (359)

Deteriorate (209)

Higher Same Lower Not applicable

Those who are optimistic about the future are more likely expect their level of business investment to increase

In line with June 2009 findings, businesses who feel optimistic about their future are more likely to expect invest in their business to be higher. Almost half of those who expect their business climate to

improve (47%) expect their overall levels of investment to increase, while over half of those with pessimistic outlook expect decreasing investments (52%).


Q Excluding seasonal variations, what are the expected trends for the next 12 months, with regard to overall investment?


48

20%

2%

11%

12%

-6%

-10%

1%

18%

3%

-6%

-14%

-2%

17%

-6%

-9%

-7%

-2%

4%

-1%

Buildings (837)

Plant and machinery (834)

Product and processdevelopment (828)

Marketing and sales (834)

Training and retraining (831)

Jun 2008 Nov 2008 Jun 2009 Nov 2009

Expected investments in buildings remain pessimistic, while outlook for investments in plant and machinery and training and retraining look more optimistic

Q Excluding seasonal variations, what are the expected trends for the next 12 months, with regard to investments in …?*

The net level of businesses that expect to invest more in buildings and marketing/sales have decreased further since June, with net more scores dropping to -9% and 4% respectively. Expectations for investments in plant and machinery as well as training and retraining

are more optimistic, as shown by increase net more scores of -7% and -1%.

Net higher

Base: All businesses in Yorkshire and Humber answering (Nov 2009 bases shown in brackets)

*Question wording changed slightly in November 2009

49

-9%

-7%

-2%

4%

-1%

-8%

-14%

-1%

10%

0%

Buildings

Plant and machinery

Product and processdevelopment

Marketing and sales

Training and retraining

Yorkshire & Humber England

Expected levels of investments in plant and machinery are more positive in the region compared to national findings

Q Excluding seasonal variations, what are the expected trends for the next 12 months, with regard to investments in …?

The net level of businesses that expect to invest more in marketing and sales is higher in England (10%) than in the region of Yorkshire and Humber (4%). However, the positive trend in plant and machinery investments seems to be characteristic to the Yorkshire & Humber region, with a net more score of -7% compared to -14% national average.

Net higher

Base: All businesses in Yorkshire and Humber answering (Nov 2009 bases shown in brackets)

(831)(4404)

(834)(4408)

(828)(4344)

(834)(4376)

(837)(4387)

50

21%

17%

13%

13%

11%

14%

12%

6%

18%

17%

15%

15%

13%

12%

11%

5%

Manufacturing

Primary

Hotels/catering





Construction

Jun 2009 Nov 2009

Public/ personal service, Hotel/catering and Finance sectors are most inclined to invest in plant and machinery

Manufacturing firms are most optimistic about their investment in plant and machinery over the next 12 months, with 18% expecting higher levels, however this is 3% less than in June. Businesses in the Hotels/catering, Financial/Business services and Public/personal

services sectors are most likely to increase their investment.


Q Excluding seasonal variations, what are the expected trends for the next 12 months, with regard to investments in plant and machinery?

(197)(152)

(24*)(25*)

(74*)(37*)

(112)(80*)

(284)(230)

(260)(191)

(62*)(41*)

(103)(76*)

% higher

51

Similar to the NBS results, the BCC survey results show improvements in the investments levels in plant & machinery

-40

-30

-20

-10

0

10

20

30

40

Q1

02

Q3

02

Q1

03

Q3

03

Q1

04

Q3

04

Q1

05

Q3

05

Q1

06

Q3

06

Q1

07

Q3

07

Q1

08

Q3

08

Q1

09

Q3

09

Plant & Machinery - Manufacturing

Plant & Machinery - Service


Investments, by Plant & machinery, within manufacturing and servicing sectors

52

38%

39%

41%

30%

25%

39%

26%

17%

30%

30%

25%

24%

24%

17%

17%

5%

Manufacturing

Public/personal servicesFinancial/Business

ServicesRetail and Distribution

Construction

Hotels/catering


Primary

Jun 2009 Nov 2009

Investment in marketing and sales is expected to decrease in all sectors, most notably in the hotels/catering sector

All sectors in the region are less likely to expect higher investments in marketing and sales than they were in June. The Primary sector is least optimistic with only 5% expecting an increase in investments. Manufacturing and

Public/personal services are the most optimistic with three in ten expecting increased investment in sales and marketing activities (both 30%).


Q Excluding seasonal variations, what are the expected trends for the next 12 months, with regard to investments in marketing and sales?

(197)(152)

(119)(81*)

(297)(231)

(273)(187)

(103)(77*)

(77*)(39)

(62*)(43*)

(20*)(22*)

% more

53

Section 6

Access to finance and credit

54

17%

20%

23%

20%

Overall


Some businesses across all sectors had to raise or renegotiate sources of finance or credit. The Primary sector is most likely to expect to renegotiate existing finance or credit in the future.

17% of businesses had to raise new sources of finance or credit in the past year, just under a quarter renegotiated existing finances (23%). One in five (20%) plan to do either in the next 12 months. The Services industries are most likely to try to raise new finance or credit in the next year (23% Public/personal, 22% Financial/business), while the

Primary sector is most likely to expect to renegotiate existing finance or credit in the next 12 months (35%).


Q As a direct result of the current economic conditions, which of the following actions has your business undertaken in the past 12 months / does your business expect to undertake in the next 12 months?

UndertakenExpect to undertake

UndertakenExpect to undertake

Raise new sources of finance or credit

Renegotiate existing finance or credit

Primary 22% 17% 38% 35%

Manufacturing 21% 20% 23% 24%

Construction 6% 21% 20% 18%

Retail and Distribution 17% 18% 23% 22%

Hotels/catering 19% 18% 28% 11%

Transport/storage/comms 14% 18% 26% 20%

Financial/Business Services

16% 22% 21% 20%

Public/personal services 16% 23% 13% 10%

Rai

se n

ew s

ourc

es o

f fin

ance

or

cred

it

Ren

egot

iate

exi

stin

g fin

anc

e o

r cr

edit

55

17%

17%

10%

20%

20%

20%

1-9

10-49

50+

As expected, those who feel less confident about the downturn continue to be more likely to be in need of new sources of credit or finance

Small and medium sized businesses are more likely to have raised new sources of finance in the past year, compared to large businesses, however, there are no differences in the plans to do so in the next 12 months.

Similar to the findings of June 2009, businesses who feel less confident about their ability to weather the economic downturn are more likely to consider raising new sources of credit or finance.


9%

15%

18%

34%

14%

18%

26%

29%

Very well placed

Fairly well placed

Not very well placed


Size of Business Weathering the downturn

Q As a direct result of the current economic conditions, which of the following actions has your business undertaken in the past 12 months / does your business expect to undertake in the next 12 months? Raise new sources of finance or credit

% Expect to undertake% Undertaken

(501)

(187)

(69*)

(459)

(159)

(62*)

(72*)

(64*)

(446)

(398)

(166)

(149)

(65*)

(61*)

56

22%

27%

16%

20%

20%

20%

1-9

10-49

50+

Those who feel confident about their business’ position are less likely to plan to renegotiate their existing finance or credit

Medium sized businesses were more likely to renegotiate their existing finance or credit in the past 12 months. In line with previous findings, businesses who feel more confident about the position of their business are less likely to

consider renegotiations.


10%

21%

27%

35%

11%

18%

24%

27%

Very well placed

Fairly well placed

Not very well placed


Size of Business Weathering the downturn

Q As a direct result of the current economic conditions, which of the following actions has your business undertaken in the past 12 months / does your business expect to undertake in the next 12 months? Renegotiate existing finance or credit

% Expect to undertake% Undertaken

(501)

(187)

(69*)

(459)

(159)

(62*)

(72*)

(64*)

(446)

(398)

(166)

(149)

(65*)

(61*)

57

39% 38%

44%

32%

40% 38%

44%

38%

27% 28%31%

13%

Overall (206) 1-9 (127) 10-49 (58*) 50+ (20*)

Finding affordable finance or lines of credit Finding organisations who were willing to lend to the business

Satisfying the terms and conditions of potential lenders

Almost two fifths of businesses in the region experienced problems in accessing finance or credit

Two in five businesses in the region experienced problems when trying to find affordable finance or lines of credit (39%) or find organisations who were willing to lend to the business (40%). Over a quarter report difficulties with

satisfying the terms and conditions or potential lenders (27%).Base: All businesses in Yorkshire and Humber answering who have raised new sources of finance or credit or renegotiated existing finance or credit in the past 12 months (shown in brackets);*Caution: small base size (<100) **Caution: very small base size (<10)

Q What problems, if any, did your business experience in accessing finance or credit?

Size of business

58

39%36%

39%40%

31%

49%

27% 25%29%

Overall (206) Well placed (122) Not well placed (83*)

Finding affordable finance or lines of credit

Finding organisations who were willing to lend to the business

Satisfying the terms and conditions of potential lenders

In line with June’s findings, those businesses less confident about their future are more likely to find it difficult to find organisations who are willing to lend to them

Base: All businesses in Yorkshire and Humber answering who have raised new sources of finance or credit or renegotiated existing finance or credit in the past 12 months (shown in brackets); Caution: small base size (<100)

Q What problems, if any, did your business experience in accessing finance or credit?

Weathering the downturn

Businesses who feel not well placed to weather the downturn are more likely to have experienced difficulties with finding organisations who were willing to lend to them (49%) and slightly more likely to have experienced problems when finding affordable finance or lines of

credit (39%) or satisfying the terms and conditions of potential lenders (29%).

59

Section 7

Business cost pressures

60

Cost pressures continued to ease over the past 6 months, however the cost of finance increased compared to the previous wave

Q Which of the following costs have increased for your business over the past 12 months?

Base: All businesses in Yorkshire and Humber answering (June 2008: 1,083 November 2008: 802; June 2009: 1,161; November 2009: 849)

The proportion of businesses in the region who report cost increases has decreased for most measures and only just over three quarters (76%) reported higher energy costs. 28% reported an increase in cost of finance.

89%

76%

65% 63%

35%38%

9%

1%

88%

72%

58%53%

33% 34%

7%2%

80%

66%

58%

41%

25%30%

10%

2%

76%

64%

53%

37%

24%

7%4%

28%

Energycosts

Transportcosts

Rawmaterials

Staff costs Cost offinance

Propertycosts

Other costs None ofthese

Jun 2008 Nov 2008 Jun 2009 Nov 2009

61

The number of businesses who expect a rise in energy and transport costs has increased compared to June 2009

Q Which of the following costs do you expect to increase over the next 12 months?

85%

75%

67% 66%

38% 35%

9%

1%

75%

53% 53%47%

30% 32%

7%3%

59% 57% 56%

45%

30% 29%

8%3%

70%63%

52%46%

32% 30%

8%3%

Energycosts

Transportcosts

Rawmaterials

Staffcosts

Propertycosts

Cost offinance

Othercosts

None ofthese

Jun 2008 Nov 2008 Jun 2009 Nov 2009

Base: All businesses in Yorkshire and Humber answering (June 2008: 1,060; November 2008: 752; June 2009: 1,017; November 2009: 816)

7 in 10 businesses (70%) expect their energy costs to increase over the 12 months, an increase of 11% points on June’s results. The proportion of businesses expecting higher transport cost has also increased, now at 63%.

62

Raw materials and energy costs continue to be the main upward cost pressure for businesses in the region

Q Which of the following presents the main upward cost pressure on your business at present?

Raw materials cost present the main upward cost pressure (30%), however, the pressure has softened compared to June 2009 (37%).

41%

37%

30%

37%

11% 11%

4%2%

33%36%

24%

29%

14%

10%

5% 5%

37%

29%26% 26%

12% 13%

7%

2%

30%

26%24% 24%

11%9%

5%2%

Rawmaterials

Energycosts

Staffcosts

Transportcosts

Cost offinance

Propertycosts

Othercosts

None ofthese

Jun 2008 Nov 2008 Jun 2009 Nov 2009

Base: All businesses in Yorkshire and Humber answering (June 2008: 932; November 2008: 661; June 2009: 974, November 2009: 755)

63

Businesses who feel less confident about their future business climate are more likely to expect costs to increase

Q Which of the following costs to you expect to increase in the next 12 months?

Over three quarters (76%) of those less confident about their future business climate expect energy costs to rise, 67% their transport costs and 59% their raw materials costs.

63%

57%

50%

54%

31%

33%

5%

3%

70%

63%

50%

43%

28%

32%

11%

4%

76%

67%

59%

44%

33%

30%

6%

3%

Energy costs

Transport costs

Raw materials

Staff costs

Cost of finance

Property costs

Other costs

None of these

Improve (250) Remain stable (352) Deteriorate (204)

Base: All businesses in Yorkshire and Humber answering (November 2008: 661; June 2009: 974, November 2009: 755)

Business Climate Expectations

64

88%

77%

76%

67%

66%

65%

62%

53%

60%

63%

72%

56%

58%

59%

66%

79%



Primary (27*)




Manufacturing (145)

Construction (71*)

Energy Costs Transport Costs

The Hotels/catering sector is expected to be most affected by rising energy costs, while the Construction sector is most likely to expect an increase in transport costs

Base: All businesses in Yorkshire and Humber answering finance or credit in the past 12 months; Caution: small base size (<100)

Q Which of the following costs to you expect to increase in the next 12 months?

Nine in ten (88%) Hotels/catering businesses expect their energy costs to rise, six in ten (60%) their transport costs. Construction firms are most likely to be concerned about an increase in transport costs

(79%), while energy costs are a smaller issue for this sector (53%).

65

68%

32%

63%

37%

55%

43%

47%

52%

Yes

No

6%

62%

7%

56%

6%

49%

33%

10%

6%

41%

44%

8%

Yes - all these increases

Yes - some increases

No - costs increased but didnot pass on

No - no increase in costs

Jun 2008 Nov 2008 Jun 2009 Nov 2009

Businesses continue to feel strong competition as less than half report to pass on costs to their customers

Q Have you passed on any increased costs to your customers in the past 12 months?

Less than half of businesses passed on costs to their customers in November (47%), a considerable drop from 55% in June. 44% stated that their costs did increase but they chose not to pass them on to customers.

Base: All businesses in Yorkshire and Humber answering (June 2008: 1,128; November 2008: 836; June 2009: 1,194, November 2009: 903)

66

60%

57%

56%

49%

45%

45%

44%

35%

40%

43%

44%

51%

52%

55%

54%

64%


Construction (82*)

Manufacturing (162)



Primary (25*)



Yes No

The retail sector is most likely to have passed on costs to their customers, financial/business services firms are least likely

Base: All businesses in Yorkshire and Humber answering (shown in brackets); Caution: small base size (<100)


The majority of Retail/distribution (60%), Construction (57%) and Manufacturing (56%) businesses continued to pass on costs to their customers, while the remaining sectors, most notably

Financial/business services (64%), chose not to pass on any costs.

67

Section 8

Business strategies

68

Over 6 in 10 businesses in the region do not have a formal growth plan. Financial services and Manufacturing firms are more likely to have a growth plan.

35%

61%

33%

64%

30%

67%

35%

64%

4%2%

3%1%

Yes

No

Don'tknow

Jun 2008 (1,117) Nov 2008 (837)

Jun 2009 (1,200) Nov 2009 (900)

The proportion of businesses with a formal growth plan has increased by 5% points since June and is now at 35%, still below the national average of 39%. Financial/business services companies are most likely to have a growth plan (44%), followed by Manufacturing businesses (41%). In line with June 2009, the Construction sector is least likely to

have growth plans (15%).

Yes NoDon’t know


44% 54% 1%

Manufacturing (161) 41% 59% *


40% 58% 2%


39% 61% 0%

Retail and Distribution (211) 32% 67% 2%

Hotels/catering (44*) 28% 71% 1%

Primary (28*) 24% 76% 0%

Construction (79*) 15% 83% 2%

Q Does your company have a formal business growth plan?

Base: All businesses in Yorkshire and Humber answering *Caution: small base size (<100)

69

Those who feel well placed to weather downturn are more likely to have a formal growth plan, while only 16% of those who feel not at all well placed have a growth plan



Those who feel well placed to weather the downturn are more likely to have a formal business growth plan. Almost half (48%) of those who feel ‘very well placed’ have a plan compared with

16% of those who feel ‘not at all well placed’.

48%

40%

19%

16%

51%

58%

80%

83%

1%

1%

1%

1%

Very well placed(101)

Fairly well placed(528)

Not very wellplaced (178)

Not at all wellplaced (75*)

Yes No Don't know

Wea

ther

do

wnt

urn

70

Businesses who report an improvement in their business performance are more likely to have a growth plan



Those whose business performance improved over the past 12 months are more likely to have a business growth plan (49%). Under a third of those who said their performance remained stable (30%)

or deteriorated (32%) currently have a formal growth plan.

49%

30%

32%

50%

69%

67%

1%

1%

1%

Improved (190)

Remained stable(263)

Deteriorated (444)

Yes No Don't know

Bus

ines

s pe

rfor

man

ce

71

Large businesses are most likely to have a formal growth plan



Almost three quarters of large businesses have a growth plan (73%), compared to half of medium sized businesses (50%) and under three in ten small businesses (29%).

29%

50%

73%

70%

48%

26%

1%

1%

1%

1 - 9 (617)

10 - 49 (209)

50+ (72*)

Yes No Don't know

Bus

ines

s si

ze

72

36%

58%

5%

Q Has your business introduced a new product or process innovation in the past 12 months?

Base: All businesses in Yorkshire and Humber answering (703)

Over a quarter of businesses in the region introduced a new product innovation (27%) and one in ten (9%) a process innovation in the past 12 months. 44% of Retail/distribution businesses introduced

either. Construction businesses were least innovative in the past year (14%).

Yes

No, neither

Don’t know

9%

27%

New product innovation

New process innovation

Over a third of businesses introduced innovations in the past 12 months

Yes

Retail and Distribution (165) 44%


40%


38%


38%

Hotels/catering (33*) 36%

Manufacturing (111) 35%

Primary (24*) 33%

Construction (74*) 14%

73

Large businesses are most likely to invest in innovation. Findings also suggest a positive impact of innovation on business performance



24%

35%

54%

9%

8%

14%

61%

53%

20%

5%

4%

11%

1 - 9 (506)

10 - 49 (154)

50+ (41*)

Yes - a new product innovation Yes - a new process innovation

No Don't know

Almost seven in ten large businesses introduced an innovation in the past year (68%), compared to a third (33%) of small and two in five (43%) medium sized businesses.

74

Businesses whose performance has improved are most likely to have had introduced a new product or process innovation



29%

29%

25%

16%

8%

7%

50%

56%

63%

4%

7%

5%

Improved (135)


Deteriorated (357)

Yes - a new product innovation Yes - a new process innovation

No Don't know

Firms whose business performance has improved in the past year are most likely to have invested in new process innovations (16%), while businesses with deteriorating performance were least likely to

innovate (32%).

Bus

ines

s pe

rfor

man

ce

75

80%

38%

25%

6%

81%

29%

23%

4%

Information tehnologies inc. electronic andcommunication technologies

Engineering and materials technolgies

Environmental ,low carbon or sustainable technologies

Biology ,or life sciences technologies

Yorkshire & Humber (437) England (2446)

Most businesses in the region use information technologies. Engineering and materials technologies are more prevalent in the region


Q Does your business use any of the following technologies in your production process?

Four in five businesses use information technologies (80%). Almost four in ten also use engineering and materials technologies (38%), considerably more than in England overall (29%). Usage of

environmental, low carbon or sustainable technologies are fairly in line with the national average.

76

Public/personal services companies are most likely to use biology or life sciences technologies, while environmental, low carbon, sustainable technologies are most common among Construction businesses


Q Does your business use any of the following technologies in your production process?

90% of Financial/business services companies use information technologies, while 81% of Manufacturing firms use engineering and materials technologies.

Information technologies

Engineering and materials

technologies

Environmental, low carbon, sustainable

technologies

Biology or life sciences technologies

Retail and Distribution (90*) 71% 48% 29% 6%


90% 22% 19% 3%

Public/personal services (37*) 92% 30% 30% 16%

Transport/storage/comms (26*) 87% 15% 18% 0%

Hotels/catering (10*) 100% 0% 13% 0%

Manufacturing (98*) 54% 81% 17% 4%

Primary (11*) 84% 52% 31% 11%

Construction (29*) 54% 61% 46% 0%

77

48%

39%

33%

10%

55%

36%

29%

9%

Information technologies inc. electronic andcommunication technologies

Engineering and materials technolgies

Environmental ,low carbon or sustainable technologies

Biology ,or life sciences technologies

Yorkshire & Humber (184) England (1089)

Fewer businesses in the region sell information technologies compared to England overall


Q Does your business sell products within any of the following technologies?

Less than half of businesses in the region sell information technologies (48%), compared to 55% overall. Engineering and materials technologies (39%) and environmental products (33%) as well as

biology or life science technologies (10%) are slightly more common in Yorkshire than England overall.

78

The proportion of businesses taking steps to reduce their CO2 emissions continues to increase but remains below the national average

Q Have you taken any steps to reduce the CO2 emissions of your business?


The proportion of businesses taking steps to reduce their CO2 emissions has continued to increase between June and November 2009: 45% of businesses in the region now take action to reduce their CO2 emissions, slightly below

the national average of 50%.

27%

33%

42%

45%

43%

39%

38%

48%

30%

28%

20%

7%

June 2008 (1,123)

November 2008(832)

June 2009 (1,173)

November 2009(902)

Yes No Don't know/Not applicable

79

Hotels/ catering and Transport/storage/comms businesses are most likely to take action to reduce CO2 overall

49%

49%

46%

45%

38%

34%

47%


Transport/storage/comms(47*)

Financial and BusinessServices (242)

Retail and Distribution(210)

Manufacturing (161)

Construction (80*)

Primary (28*)

Q Have you taken any steps to reduce the CO2 emissions of your business?


39%

64%

74%

1 - 9 (618)

10 - 49(208)

50+ (74*)

Sector Business size

80

70%

48%

44%

39%

27%

13%

9%

7%

47%

48%

38%

39%

25%

25%

31%

12%

Adopting a recycling scheme

Adopting an energy saving scheme

Adopting a waste minimisation scheme

Introduction/purchasing environmentallyfriendlyproducts

Adopting a water saving scheme

Accessing consultancy or advice

Accessing external support grants

Achieving formal environmental accreditation

% Undertaken (503) % Expect to undertake (385)

The majority of businesses in the region adopted a recycling scheme in the past 12 months and just under half are planning to do so in the next year

The majority of businesses in the region adopted a recycling scheme (70%), however, this is below the national average of 76%. Only one in ten (9%) accessed external support grants in the past 12 months, but

almost a third (31%) plan to do so in the next year.


Q Have you undertaken or do you plan to undertake any of the following actions to improve your environmental performance?

81

Section 9

Business collaboration and support

82

The majority of businesses have heard of Business Link, however, less than a third have used Business Link in the past 12 months

92%

88%

92%

93%

8%

12%

8%

7%

June 2008(1,090)

November2008 (827)

June 2009(1,185)

November2009 (903)

Q Have you heard of Business Link?

Base: All businesses in Yorkshire and Humber answering (shown in brackets) *Caution: small base size (<100) **Question wording different (no time scale set in previous waves)

Over nine in ten businesses in the region are aware of Business Link (93%). A third (31%) have used the service in the past 12 months – this compares to nearly three quarters (72%) of the Business Link sample. A quarter (27%) of businesses plan to use

Business Link in the next 12 months (62% of the Business Link sample).

46%

38%

48%

31%

51%

58%

49%

67%

3%

5%

3%

2%

June 2008(955)

November2008 (666)

June 2009(1,037)

November2009 (834)

Q Have you used Business Link in the past 12 months**?

Q Do you plan to use Business Link in the next 12 months?

June 2009(5,397)

Yes No Don't know / Not applicable27% 40% 33%November2009 (822)

83

Hotels/catering businesses and Manufacturing firms are most inclined to use Business Link in the next 12 months


Q Have you heard of Business Link? / Have you used Business Link in the last 12 months? / Do you plan to use Business Link in the next 12 months?

Business Link is most known among Public/personal services (97%) and Manufacturing (97%) businesses, the latter also being the most likely to have used the service in the past 12 months. Of the Business Link sample Primary and Financial/Business service firms

are most likely to have used the service. Hotels/catering (36%) and Manufacturing (35%) businesses are most likely to plan to use Business Link in the next 12 months – Construction firms in the Business Link sample are most likely to use the service

Heard of BL Used BL Plan to use BL

Retail and Distribution (210) 93% 26% 24%

Financial/Business Services (243) 93% 36% 31%

Public/personal services (88*) 97% 33% 29%

Transport/storage/comms (47*) 92% 35% 22%

Hotels/catering (43*) 92% 34% 36%

Manufacturing (162) 97% 38% 35%

Primary (27*) 92% 28% 17%

Construction (81*) 86% 24% 17%

84

96%

93%

92%

36%

31%

30%

37%

24%

25%

Improved

Remained stable

Deteriorated

Heard of Business Link Used Business Link Plan to use Business Link

Businesses whose business performance has improved over the past 12 months are more likely to have used Business Link’s service and are also most likely to plan to use it in the next year

Businesses who reported that their business performance has improved in the past year are most likely to have used Business Link (36%). Almost four in ten (37%) also plan to use Business Link in the next 12

months.


Q Have you heard of Business Link? / Have you used Business Link in the last 12 months? / Do you plan to use Business Link in the next 12 months?

(188)

(180)

(179)

(266)

(446)

(243)

(238)

(403)

(402)

85

In line with the national average, a quarter of businesses think of themselves as a social enterprise

25%

75%

Q Do you think of your business as a social enterprise?

Yes

No

49%

48%

27%

22%

19%

15%

13%

7%


Public/personal services(85*)


Primary (27*)


Manufacturing (161)

Financial/BusinessServices (239)

Construction (79*)

A quarter of businesses think of themselves as a social enterprise. This figure rises to almost half for the Hotels/catering (49%) and the Public/personal services sectors (48%). Only 7% of Construction businesses

consider themselves a social enterprise.


86

Section 10

Human resources and training

87

The positive trend in the markets is reflected in the slightly lower proportion of businesses, compared to June 2009, reporting that they are operating below capacity

Q Is your present level of output below capacity (i.e. are you working below a full rate of operation)?


68% of businesses report that they are currently operating below capacity, a slight drop of 2% points from June’s results. The Hotels and catering sector remains most affected, with 76% of businesses

operating below capacity.

63%

63%

70%

68%

37%

37%

30%

32%

June 2008 (1,111)

November 2008 (821)

June 2009 (1,174)

November 2009 (898)

Yes NoSector % Yes

Hotels and catering (44*) 76

Manufacturing (163) 75

Retail and distribution (206) 73

Construction (82*) 72

Financial/Business Services (240) 69

Public/ personal services (87*) 67

Transport/ storage/ comms (46*) 61

Primary (28*) 43

88

The large majority of businesses have not had difficulties in filling staff vacancies, reflecting the current economic climate

23%

17%

11%

12%

71%

79%

83%

84%

6%

4%

6%

4%

June 2008(1,098)

November2008 (816)

June 2009(1,116)

November2009 (839)

Q Did you have any staff vacancies that you found hard to fill, or could not fill, during the past 12 months?


12% of businesses had difficulties filling staff vacancies in the past 12 months and the same proportion expect to have the same problems in the next 12 months.

Q And do you expect to have any in the next 12 months?

19%

12%

10%

12%

63%

72%

74%

73%

17%

16%

16%

15%

June 2008(1,093)

November2008 (806)

June 2009(1,102)

November2009 (839)

Yes No Don't know

89

Just under half of businesses have a training plan with Public/personal services sector businesses being most likely to have one.

Q Does your company have a staff or employee training plan?


Just under half of businesses (48%) half a staff or employee training plan, compared to 52% in England overall. Public/personal services businesses are most likely to have a training plan (62%), while only a third of

Construction firms have a formal development plan (33%).

48%52%

1%

Yes

No

Don’t know62%

55%

49%

47%

47%

45%

40%

33%

Public/personal services(86*)


Financial/BusinessServices (237)


Manufacturing (161)

Primary (27*)


Construction (79*)

90

67%

71%

16%

13%

8%

70%

72%

14%

14%

9%

Internal training

External training

Train to Gain

National ApprenticeshipService

Investors in people

Used in the past 12 months (586) Expect to use in next 12 months (497)

The majority of businesses currently provide internal or external training and slightly higher proportions expect to do so in the next 12 months

External training is the most popular training plan among businesses in the region and was used by 71% in the past 12 months, and a similar proportion plan to use it in the next year (72%).


Q Have you used any of the following training plans in the past 12 months? Do you expect to use any of these programmes in the next 12 months?

91

Appendix A

Additional charts of interest

92

The majority of sales are regional, with only a minority of companies doing business outside of the UK

Q Please estimate the proportion of your sales in the following areas…


The majority of businesses are reliant on regional sales, with 69% having over 50% of their sales in the region, and a third (33%) estimating that 50% or more of their sales are in the rest of the UK. Only a minority have sales outside of

the UK.

30%

37%

18%

44%

58%

52%

10%

20%

7%

5%

69%

34%2%

2%

6%

5%

Within region(845)

Rest of UK (615)

Within the EU(300)

Outside the EU(249)

0% 1-25% 26-50% Over 50%

93

Similarly, the majority of purchases are made within the region

Q Please estimate the proportion of purchases in the following areas…


Purchases are also largely concentrated in the UK, with six in ten businesses (59%) making over 50% of their purchases in the region, and three in ten (31%) doing so in the rest of the UK.

Only a minority make purchases outside of the UK.

23%

33%

24%

44%

53%

39%

16%

23%

11%

15%

59%

30%

13%

13%

3%

1%Within region

(765)

Rest of UK (659)

Within the EU(281)

Outside the EU(226)

0% 1-25% 26-50% Over 50%

94

37%

49%

46%

43%

40%

22%

10%

30%

37%

31%

45%

48%

43%

19%

16%

12%

28%

67%

Yorkshire and Humber

Primary

Construction

Manufacturing

Hotels/catering





Jun 2009

Nov 2009

(63*)

In November, Hotels/catering and Manufacturing businesses are more likely to report that raw materials and bought-in services are the main upward cost pressure

Q Which of the following presents the main upward cost pressure on your business at present? – Raw materials and bought-in services (other than energy)


(65*)

(103)

(240)

(52*)

(22*)

(92*)

(172)

(228)

(19*)

(142)

(35*)

(177)

(79*)

(201)

(37*)

95

26%

52%

20%

12%

22%

21%

31%

24%

26%

45%

22%

18%

27%

18%

19%

30%

22%

39%


Primary

Construction

Manufacturing

Hotels/catering





Jun 2009

Nov 2009

(63*)

The construction sector is most affected by transport costs

Q Which of the following presents the main upward cost pressure on your business at present? – Transport costs


(65*)

(103)

(240)

(52*)

(22*)

(92*)

(172)

(228)

(19*)

(142)

(35*)

(177)

(79*)

(201)

(37*)

96

26%

18%

20%

30%

21%

22%

16%

24%

17%

24%

23%

37%

24%

33%

19%

10%

19%

47%


Primary

Construction

Manufacturing

Hotels/catering





Jun 2009

Nov 2009

(63*)

Hotel/catering businesses and Public/personal services firms are most likely to report staff costs as their main upward cost pressure

Q Which of the following presents the main upward cost pressure on your business at present? – Staff costs


(65*)

(103)

(240)

(52*)

(22*)

(92*)

(172)

(228)

(19*)

(142)

(35*)

(177)

(79*)

(201)

(37*)

97

26%

36%

39%

20%

32%

42%

47%

36%

39%

48%

37%

49%

47%

50%

34%

41%

Primary

Construction

Manufacturing

Hotels/catering





Jun 2009

Nov 2009

(82*)

In November 2009 businesses were less likely to pass on cost increases to their customers



(80*)

(124)

(303)

(66*)

(24*)

(199)

(262)

(25*)

(162)

(43*)

(211)

(89*)

(242)

(47*)

(112)

% No, costs increased, but did not pass on

98

29%

19%

25%

61%

27%

20%

25%

26%

31%

13%

28%

42%

35%

24%

17%

30%

30%

35%


Primary

Construction

Manufacturing

Hotels/catering





Jun 2009

Nov 2009

(63*)

Hotel/catering businesses are most likely to report energy costs as the main upward cost pressure

Q Which of the following presents the main upward cost pressure on your business at present? – Energy costs


(65*)

(103)

(240)

(52*)

(22*)

(92*)

(172)

(228)

(19*)

(142)

(35*)

(177)

(79*)

(201)

(37*)

99

The recession keeps affecting smaller businesses more severely with over two thirds operating below capacity

Q Is your present level of output below capacity?


Businesses with less than 50 employees are more likely to be working below capacity (67% of those with 1-9 employees and 75% of those with 10-49 compared with 59% of those with 50+).

67%

75%

59%

33%

25%

41%

1-9 (613)

10-49 (209)

50+ (74)

Yes No

100

Those whose business performance deteriorated are more likely to operate under capacity

Q Is your present level of output below capacity?


Unsurprisingly, those whose business performance has deteriorated are most likely to say that they are operating below capacity (86% compared with 42% of those with improved performance).

42%

60%

86%

58%

40%

14%

Improved (193)


Deteriorated (442)

Yes No

Bu

sin

ess

Pe

rfo

rman

ce

101

Appendix B

Guide to statistical reliability

102

Guide to Statistical Reliability -1

The variation between the sample results and the “true” values can be predicted from knowledge of the size of the samples on which the results are based and the number of times that a particular answer is given. The confidence with which this prediction can be made is usually chosen to be 95% - that is, the chances are 95 in 100 that the “true” value will fall within a specified range, based on a random ‘pure’ sample of the population.

The table below illustrates the predicted ranges for different sample sizes and percentage results at the “95% confidence interval”.

Sample Size 10% or 90 % 30% or 70% 50%

+ + +5,000 1 1 12,500 1 2 21,000 2 3 3800 3 4 4

Approximate sampling tolerances applicable to percentages at or near

these levels

103


Therefore, with a total sample size of 1,000 completed interviews, where 50% give a particular answer, the chances are 19 in 20 that the “true” value (which would have been obtained if the whole population had been interviewed) will fall within the range of +3 percentage points from the sample result; in fact the actual result is proportionately more likely to be closer to the centre (50%) than the extremes of the range (47% or 53%).

When the results are compared between separate sub-groups within a sample, different results may be obtained. The difference may be “real,” or it may occur by chance (because not everyone in the population has been interviewed). To test if the difference is a real one - i.e. if it is “statistically significant” - it is again necessary to know the total population, the size of the samples, the percentage giving a certain answer, and the degree of confidence chosen. Assuming the “95% confidence interval”, the differences between the two sub-sample results must be greater than the values given in the table on the next slide:

104


10% or 90% 30% or 70% 50%+ + +1 2 22 3 32 3 4

5000 vs 50002500 vs 25004000 vs 1000

Differences required for significance at or near these

percentage levelsSample sizes

For example, if 50% of the 4,000 sample give a particular answer, and 51% of the 1,000 sample give the same answer, there is not a statistically significant difference between the responses of the two groups. If however there is 54% of the 1,000 sample giving the same answer there is a significant difference as the there is at least 4 points difference

105

If you have any questions regarding this report please contact:

Joe Marshall

Director

[email protected]

+44 (0)207 347 3408

Lisa Nicholl

Senior Research Executive

[email protected]

+44 (0)207 347 3407

yorkshire and humber nbs report

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