East of England is emerging as one of the country’s most successful export hubs and many firms in the region have high hopes for further international growth.
These are among the findings of the Norwich Economic Barometer by Norwich City Council, which offers a regular overview of business news and the local economy through official analysis.
The export news comes from a study of more than 3,000 UK firms by Alibaba Group UK and the Institute of Export and International Trade, which found that 91 per cent of goods-producing businesses across the East of England are currently exporting, well above the UK national average of 79 per cent.
The survey – focused on firms with revenues above £1 million – revealed that over three quarters expect their export sales to increase in the next 12 months. Nearly three in ten anticipated a “significant increase” in sales.
Whilst nearly two fifths see the EU as the largest export opportunity, the biggest scope for future growth are seen in North America (30 per cent) and South/Central America (25 per cent). Exporters also believe that selling overseas has made their businesses more resilient and has fuelled innovation, including digital change. Most exporters in the region are using online marketplaces to boost international sales.
The Barometer also reveals a rise in planned recruitment drives after confidence in the East of England jumped in April by the joint-largest rate of any UK region. According to the business barometer from Lloyd’s Bank, a net balance of 24 per cent of businesses in the region expect to increase staff levels over the next year, up 16 points on the previous month. It comes after a rise in business confidence of 18 points during April to 35 per cent, as firms turned significantly more confident on their own business prospects and on optimism in the economy.
Key targets for growth at businesses in the next six months are diversifying into new markets, evolving offers and investing in teams.
The tourism sector in the East of England will perform well this year despite the cost-of-living crisis, although profits in the sector remain under pressure. A survey of 140 firms in the region highlighted in the Tourism Business Survey 2023 from accountancy firm Larking Gowen showed that some 41 per cent said turnover would be ‘more or substantially more’ than in 2022, with 35 per cent predicting it would remain the same. But only 27 per cent said profits would increase in 2023 and 45 per cent expected that they would fall.
Workforce issues, such as recruitment and retention costs, skills gaps and a shortage of workers emerge as the biggest challenges facing mid-sized businesses in the region in the next six months, according to a survey. More than a quarter of firms ranked workforce challenges as the biggest issues they face.
Areas of concern
BDO LLP’s bi-monthly Rethinking the Economy survey found that the biggest areas of concern for East Anglia businesses is recruitment of entry (70 per cent) and lower managerial levels (70 per cent). In response, it says firms intend to take significant steps to address workforce challenges over the next six months and over the next five years, many businesses in the region plan to invest in upskilling their existing workforce (30 per cent) and take action to reverse the slide in the number of over 50s workers.
Start-ups and insolvencies
East Anglia has seen a significant increase in new business start-ups but also a substantial rise in insolvency-related activity, according to restructuring trade body R3. It points to a 17 per cent increase in the number of companies set up in the region since the beginning of the year, rising from 7502 in January to 8799 in March. Meanwhile bad debts on the books of East Anglian businesses fell to 178 in March from 272 in January. But there has also been a sizeable increase in insolvency-related activities in the region since the beginning of the year. The number, which includes liquidator and administrator appointments as well as creditors’ meetings, rose by 78 per cent between January and March of this year.