Douglas McWilliams, Chief Executive at the Centre for Economics and Business Research (CEBR) made a number of interesting economic predictions at a dinner held last week to launch BDO’s fifth annual Central South Report, including foreseeing a positive end to the year for businesses. The Report aggregates the results of the region’s top 150 companies and showcases specific examples of strong growth.
To support his positive predictions McWilliams cited growth in UK exports in the last 12 months and also sales to non-European countries starting to outstrip sales to Europe in the last four months, particularly in sectors such as aerospace, a key industry in the Central South.
“The message in BDO’s Central South Report is a clear one,” he commented. “It demonstrates that there are possibilities for growth for those companies who grasp opportunity and continue to invest.”
McWilliams said he would ‘bet strongly on the breakup of the Euro’and he advises the Government to boost business growth by cutting the top rate of tax to 30%, reduce corporation taxes and get tougher on the welfare state.
Business leaders call for targeted tax incentives and more government-backed lending
During the evening, leaders from the top 150 companies were polled for their opinions on the economy. 38.5% said that they thought targeted tax incentives would assist UK businesses to fight against flat growth, and 32% said the answer was more government-backed lending to SME’s.
41% believe that the most opportunities for growth in the next 12 months will come from Central Southern Asia including India, and 38% see the most opportunity in South East Asia and Pacific, including China and Australia.
McWilliams said, “In Central Southern India the long term prospects are excellent; it will become biggest economy in the world, and will overtake China by 2030.”
There was mixed opinion on the factor that will most constrain the growth of companies who trade only in the UK, with 36% of dinner guests saying it will be downward pressure on consumer expenditure, 27% saying the Eurozone debt crisis, and 27% saying lack of access to finance.
CEO cites skills shortage as a constraint
The BDO dinner was introduced by Adrian Gunn, CEO of Matchtech Group PLC who wrote the foreword to the Report.
Gunn said, “The winners in the region are those with a global market requirement such as engineering, IT, and other major infrastructure projects.
“However, the constraint here is the skills shortage, which keeps me awake at night. It is madness that we have 2.6m people unemployed but that there are 2,500 jobs on Matchtech’s books that we can’t fill.
“It’s encouraging that this year there are more 16-24 year old apprenticeships than school leavers going to University, but that’s going to take a while to benefit business – it doesn’t help today. How long will fast-growth companies stay in UK if they can’t find the skills?”
Central South needs to put up a sign that says ‘open for business’
Gunn also put a call out for a stronger identity for the region: “One thing that has struck me during my involvement with the project is that the Report gives the region its own identity. At the moment, we’re classified as belonging to the South East or the South West, depending on who is doing the classifying. With such strong business representation and excellent initiatives such as the Solent LEP it’s time we had our own identity, and put up the sign that says, ‘we’re open for business’.”
