Midlands companies uncertain about investment
More than a third of businesses in the Midlands say they have earmarked nothing for growth opportunities, according to a survey by Yorkshire Bank.
Although it found almost a third of companies in the region plan to reinvest at least 6 per cent of turnover back into their business for commercial growth next year, a total of 40 per cent of respondents said they have not saved for reinvestment.
The survey also found that just under half of businesses have delayed either salary increases (49 per cent) or recruitment (44 per cent) in the last 12 months because of the economic climate.
Stephen Cronin, managing partner at Yorkshire Bank’s Financial Solutions Centre, said: “From the research it is clear businesses are telling us that their investment and capital expenditure plans remain uncertain over the next 12 months.
“However, with growing confidence among businesses, the time may well be right for them to invest for growth and pursue quality growth opportunities from bringing new products to market to pursuing potentially lucrative contracts.”
Most Midlands-based companies believe more staff will drive commercial growth – which more than a third identifying that as the top priority. It was followed by companies suggesting new equipment and machinery (34 per cent) and expanding their premises (32 per cent) to drive growth.
Cronin added: “The decision of when and how much cash to invest back into a business is very important. These results indicate that the majority of businesses are planning a relatively conservative spend in the next 12 months."
Over a third of businesses in the region (42 per cent) cited a lack of cash flow for delaying investment in the past year while 40 per cent of companies deemed the preservation of working capital and the perceived financial risk in the current climate (34 per cent) as necessary reasons.
