North Yorkshire shows its business strength
I am delighted to share the findings of our first annual survey of the Top 50 SMEs in North Yorkshire, as recently published in The Press. View it here
So here are the headlines. The 2015 survey shows that overall the Top 50 SMEs in North Yorkshire contribute turnover of £574 million to the North Yorkshire economy, generate pre-tax profits in excess of £54 million and employ over 4,100 people. These numbers show growing confidence and investment in the North Yorkshire region where total profits of the Top 50 grew by 20% and average profits per employee are £13,300. The contribution of the area to the Northern Powerhouse should not be under estimated.
The trend in North Yorkshire is in line with the national trend which shows companies being more profitable than ever, with the strongest performance in the services sector. At the heart of the North Yorkshire economy is the city of York. With a unique combination of excellent infrastructure, a well-educated workforce and high quality of life, York is one of the UK’s fastest growing economies.
Growth projections for the city up to 2030 suggest that the York economy will grow at a faster rate than both the UK and regional averages, with employment set to grow at over 4% more than the UK average.
With one of the strongest knowledge-driven economies in the UK, York benefits from innovation clusters around industrial bio-tech, agri-tech and hi-tech rail, sitting alongside thriving tourism, digital/IT and financial and insurance sectors.
It is not surprising therefore that businesses based in York employ 60% of the employees in the Top 50 and contribute 47% of pre-tax profits. Future Cleaning Services (48), which employs 1,000 staff, is the largest employer.
In terms of the sector spread, 20 companies providing services appear alongside 20 wholesalers, 7 manufacturers and 3 retailers.
The strongest performing sector is the services sector where total profits grew by 30%. The sector has a wide variety of firms including property developers, insurance brokers, hoteliers and holiday parks, marine oil and gas, building products and construction, haulage, communication and education.
In the wholesale sector, total profits grew by 17%. Half of the companies in the survey are wholesalers to the food industry. Pharmaceuticals, healthcare and chemical and man-made product wholesalers feature heavily amongst the remaining 50%.
The manufacturing sector represented by 7 firms in the survey showed growth in total profits of 12%.
The retail sector was the only sector where total profits have declined, falling by 19%. This shows that the high street continues to be challenging. As a recent government report noted, income levels are now back to pre-recession levels and this combined with the lowest level of inflation for decades, falling energy costs and low interest rates should provide a boost to the high street.
Profits are the fundamental driver of a free market economy. They drive tax revenues, salary rates and investment. If profits are growing therefore everything else should start to follow. The York, North Yorkshire and East Riding LEP have secured over £200m funding to deliver growth and jobs across our region so it’s a great time to be in business in North Yorkshire.