Gaps and shortfalls in skills are holding back economic progress for businesses across the East Midlands, according to the findings of a new survey by the regional office of financial and business advisers Grant Thornton.
The firm’s East Midlands Confidence Survey found that of the Leicestershire, Nottinghamshire, Lincolnshire and Derbyshire businesses taking part, more than two-thirds (69%), see the region’s skills shortage or gap as the biggest challenge to growth this year.
Local businesses say the availability of local talent and/or skills when recruiting as part of future business growth plans are an additional concern, with 63% believing there is insufficient availability in their area.
Results of the survey also reveal the East Midlands’ transport and infrastructure is a further barrier to the region’s economic progress according to 66% of businesses taking part in the poll.
This was followed by government support for businesses (34%), limited supply of commercial property (31%), and availability of funding (26%).
According to the survey, the top three investment priorities for East Midlands businesses in 2018 are technology and systems (34%), company vision culture and purpose (17%), and brand marketing and sales capability (14%).
The findings also reveal that over half (54%) of local firms see current business conditions as more difficult than the same time in 2017, with the majority (69%) having no plans for acquisitions over the coming 12 months.
However, 40% of East Midlands firms are planning to make significant capital expenditure this year, with 31% saying they expect to increase exports, and 66% reporting that their plans include recruiting apprentices, supported by the Apprenticeship Levy.
Commenting on the findings, Mark Pashley, Tax Director at Grant Thornton’s Leicester office, said: “Skills shortages continue as a major concern for local firms. Securing the right people with the right skills to support ambitious businesses is key to their growth, as well as the economic progress and stability of the region.
“It is heartening to see over two-thirds of local businesses are planning to take on an apprentice this year. With some evidence of confusion over the Apprenticeship Levy, it is encouraging that so many clearly see the scheme as a valuable route towards upskilling their workforce at relatively low cost, and this will doubtless play a part in overcoming the talent and skills gap identified by so many as a potential challenge for growth.
“Despite recent challenges and continued Brexit uncertainty, East Midlands businesses are looking to invest in their expansion and even looking beyond domestic markets with plans to increase export activity, which bodes well for their future growth and progress of the East Midlands’ economy.”
Grant Thornton’s East Midlands regional office in Leicester conducted the Confidence Survey ahead of the launch of its annual East Midlands Top 200 Report, the findings of which will be unveiled in May at events in Nottingham, Leicester and Lincoln.
“The 2017 report found that East Midlands’ businesses grew profits by an average 30% and employment by 39% over the previous three years,” explains Tom Copson, Director in Grant Thornton’s Leicester office. “This proved that East Midlands’ businesses were performing well and operating profitably, and it will be interesting to see how their profit growth has performed in the last 12 months, when the results of the 2018 Report are available next month.”
Results of the East Midlands Top 200 Report 2018 will be unveiled at breakfast briefing events in Nottingham (9th May), Leicester (10th May) and Lincoln (11th May).
Produced in partnership with the CBI, The East Midlands Top 200 Report is the region’s only dynamic, in depth study of the growth, performance and percentage rise in the profitability of businesses run from the region. Each year, it analyses the financial performance of the 200 businesses in Derbyshire, Leicestershire, Lincolnshire and Nottinghamshire that have delivered the greatest, sustained profit growth.
