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news opinion Enterprise thrives as start-ups rise 7%
Have we had the best of it? Has the recovery hit its peak, with the pace of growth now slowing as we head into 2016?
Indeed, are we likely to experience a dip in the pace of growth in subsequent years?
Economists are predicting that, in the latest cycle, we may well have experienced the UK’s best year in 2014. From now, it’s a slow tapering off.
But let’s not be gloomy. The UK is still experiencing one of the best recoveries anywhere in the world.
In
fact, our economy is marginally less buoyant than the United States, but way better than the eurozone.
So, what will happen in 2016? If the US raises interest rates, as it may do soon after this magazine goes to press, we will probably follow suit a few months (two quarters?) afterwards. The rise will be tiny, so no-one is going to have to hand their house back, and the effect on business will be negligible.
There will continue to be growth in earnings – and since companies are finding it tough to raise their prices to customers, businesses will have to cope with tighter margins. They might be able to claw some of that back by investing in technology and equipment that will give them productivity gains, but those benefits may only be felt in subsequent years.
If businesses want to forge ahead in 2016 and beyond, they are going to need funds. The levels of lending to SMEs are worryingly low. Have business owners lost their nerve? Do they think they are going to be turned down by the bank, so they would rather rely on slower, safer, organic growth?
With the annual growth rate in lending to UK SMEs at minus 0.9%, the Government needs to look carefully at how it can make access to finance even easier. Without such impetus, the recovery could stall ...
David Murray Publisher
www.businessmag.co.uk
The number of new businesses starting up in the South East grew by 7% in the year to March 2015 to reach a total of 243,000, according to the latest Barclays and BGF Entrepreneurs Index, a bi-annual series tracking the UK entrepreneurial lifecycle
The boom in the number of businesses echoed a trend seen at a national level, where the number of active companies rose by 3.86% – the biggest rise since the Index began in 2012. Nationwide, the number of company dissolutions was also lower than in the previous six months – the first time this has happened since the Index began – reversing a three-year trend.
In further evidence of the region’s healthy start-up scene, the report found that the South East saw 256 deals resulting in wealth creation of £200,000 or more over the 12 months to the end of June 2015, an increase of 19% on the same period previously.
However, the report showed that while the region’s start-up and wealth creation activity has maintained positive momentum, the proportion of high-growth companies stood at 19.9% in the year to December 2014, down 1.3% on the previous year.
Craig Jamieson (pictured), regional director, Barclays Wealth and Investment Management, Solent and Hampshire, commented on the report findings: “Entrepreneurial spirit is alive and well in Hampshire, and this is reflected in the impressive performance from the wider South East region in the latest Index, with the number of new businesses rising by 7% – testament to what a great place the region is to do business.
“However, there is clearly an opportunity to replicate the success of the start-up scene at the scale-up stage, to enable a greater proportion of Hampshire businesses to achieve high-growth ambitions. The industry needs to do more to support this segment which is why we are leading the way by offering a unique proposition for high- growth firms, providing access to a range of innovative funding, services and networks for the most ambitious businesses driving economic growth.
“Barclays is committed to supporting Hampshire’s high-growth businesses and their founders throughout their entrepreneurial life-cycle − from start up to IPO. We are passionate about helping the wealth and employment creators of the future.“
Paul Oldham, regional director at BGF, added: “As long-term equity investors in growing UK companies, we are excited by the size and dynamics of the addressable market in the South East. It is very promising to see that the region has seen such a positive rise in the number of entrepreneurs starting up their own companies and I’m hoping their confidence will encourage other business leaders to pursue their own entrepreneurial ambitions. These figures match the ambition that we experience regularly as we meet growth-oriented business owners in the region to explore the ways in which BGF can provide capital and support to achieve their near and long-term goals.“
The Barclays and BGF Entrepreneurs Index can be accessed online at:
www.barclays.com/ wealth/entrepreneursindex
@TheBusinessMag Business THE M A GA ZINE TM
In the February 2016 issue of The Business Magazine
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THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – DECEMBER 15/JANUARY 16
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