With the news that the UK is officially out of recession, we should all be
feeling on top of the world, although there’s very few corks popping around our region as yet.
There are some positives but, whilst economists may be rubbing their hands in
glee at the upsurge in the health of UK PLC, the tiny increase in Britain’s economic health means little to businesses on a practical level and many businesses in our region know they’re going to have to fight for market share if they intend to survive.
Of course, any indicator of an improvement in our financial health is good news,
but there’s still a long way to go. The taxman certainly recognises this, as can be seen
from the ‘time to pay’ agreements deferring payment for over 25,000 companies that have fallen into
arrears. And, other creditors and lenders will be all too aware that we’re a couple of years away from returning to the heady heights we enjoyed before
the recession.
Part of the problem, of course, is that to fund recovery businesses need to
raise finance but, let’s face it, the banks are going to stick pretty rigidly to their new business
plans, so the challenge is for businesses to find access to funding - the very
lifeblood of recovery. This could well mean more mergers and acquisitions which
is good news for the dealmakers in the region.
In the meantime, motor dealers are far more concerned with the effects that the
ending of the car-scrappage scheme on their franchises, than a 0.1% increase in
the economic health of our country. Similarly from our dealings with retailers
on our county magazines, I can tell you they’re more concerned with the falling levels of personal liquidity and continued
high level of unemployment, which is affecting consumer spending.
Only when all this narrows sufficiently, which the number crunchers don’t expect until the second half of the year, will the majority of the
manufacturing base in our region see genuine recovery. The service sector
however will benefit earlier, particularly the professions, as the need for
legal and financial advice grows.
With public sector cuts on the horizon after the General Election, it will be
down to business to maintain growth and any business won by one will be at the
loss of their competitor. We would therefore urge the government to keep the
burden on taxes low, as this will better our chances of a sustained recovery.
If the government – of whatever colour – can see its way to do this, then I’m confident that businesses in Yorkshire and Lincolnshire can and will emerge
from the downturn in a much stronger position than ever.
Good reading as always...
W S Fisher
Editor