With the general election uncertainty and ‘peak’ inflation and interest rates seemingly behind us, our resilient mid-corporate clients in the East of England are demonstrating a prudent optimism about the future. Although still having to manage cost pressures, wage growth and the potential impact of global political events, many are exploring various technology and investment opportunities and we are here to support them with their growth ambitions.
Head of Mid-Corporate, Eastern Region, Barclays Corporate Banking
55% of respondents are making headway in developing their business through technological innovations or diversification.
90% of businesses surveyed believe developing staff skills to meet future needs is the top priority when growing a business.
24% questioned say a lack of confidence in the market is stopping them from expanding over the next year.
According to our research, carried out in conjunction with News UK*, just under half (49%) of businesses in the East of England are confident in their ability to successfully grow their business, and a slightly higher percentage (54%) plan to expand in the next 12 months. Other key findings suggest business sentiment is fairly muted across the region; only 45% believe they’re able to access the funds needed to support business growth and 46% have confidence in the overall UK business market.
Staff recruitment and retention is the biggest challenge for just over half (51%) of businesses surveyed across the region, while 49% are worried about increased costs. A third of businesses are also concerned about economic instability.
Just over half (55%) of regional business leaders questioned say they’re making headway in developing their business more broadly through technological innovations or diversification, and 51% are looking to invest in new growth strategies over the next 18 months to two years.
A lack of confidence in the market (24%), tough competition (22%) and rules and regulations (22%) are the primary reasons businesses in the region surveyed say they aren’t expanding – this contrasts with the national picture, where lack of access to finance is the primary barrier.
We’re in a period of economic transition, and businesses are facing a mixture of challenges. However, the over-riding message I’m hearing from clients is that they’re simply rolling up their sleeves and getting on with it. Many are owner-manged businesses with long track records of successfully building their companies. As such, they’re optimistic about their ability to negotiate the various challenges they face. And it’s encouraging to see that overall businesses in the East of England are relatively confident about being able to obtain the finance they need, compared to the national picture. This fits with what we’re seeing at Barclays – we have many clients seeking financing who we’re keen to support.
Head of Mid-Corporate, Eastern Region, Barclays Corporate Banking
Nine out of ten businesses respondents across the East of England say that developing staff skills to meet future needs is the most important area to prioritise when growing a business – and 78% have staff development programmes in place.
“Talent acquisition, retention and development is of course key to long-term business success, so I’m pleased that most businesses across the region see it as a priority, particularly when thinking about expanding, and that they’re focused on investing in their staff,” says Stephen.
As we look to the future, businesses may need to put a greater focus on data and technology skills as well as prompt engineering to harness and maximize the benefits offered by artificial intelligence (AI). This will need to be coupled with the right experience and expertise to ensure that these systems are trained and maintained properly.
Head of Mid-Corporate, Eastern Region, Barclays Corporate Banking
62% of businesses feel equipped to use data to understand and respond to consumers' behaviours and experiences.
61% of businesses surveyed have started or completed digital transformation programmes.
61% of those questioned have embraced digital transformation through improved customer service using digital tool(s).
A majority (78%) of businesses surveyed in the East of England say that embracing digital transformation is the second most important factor for business growth – behind developing talent – and 61% have either completed or are currently busy with their digital transformation programmes. This includes introducing remote working (65%), using data to make better choices (52%), and using digital tools to create an improved customer service (61%).
“Many of the businesses we talk to are focusing on building their digital skills and tidying up their data, even if not yet in full digital transformation mode,” says Stephen.
Across the region, 62% of businesses said they feel equipped to use data to understand and respond to consumers' behaviours and experiences.
Aside from the 15% of businesses in the region that are already using AI, the main barrier to using it is employee skills gaps (30%). Almost a quarter (24%) questioned say it’s simply not a business priority, while 21% cite high setup costs and a lack of understanding of its benefits.
Of course, AI has the potential to be a very useful tool, but businesses should start by identifying what ambitions they’d like to achieve and what challenges they need to solve. Furnished with this clarity, they’ll be better placed to identify their next steps, including which technologies, if any, could be used to support them.
Head of Mid-Corporate, Eastern Region, Barclays Corporate Banking
In terms of Environmental, Social and Governance (ESG), 72% of business leaders in the East say they’re aware of or familiar with it as a business topic. ESG is a framework that helps businesses understand and measure their impact on society, the environment and how transparent and accountable it is. Almost three quarters of respondents (73%) say they have started their sustainability journey, which is broadly in line with the national picture (excluding London).
Nearly a third (31%) of those surveyed that have at least some awareness of ESG have a well-established approach embedded in their businesses, and 36% are in the process of either getting started or are already planning and developing their strategies.
In terms of investment in sustainability, 74% of business leaders questioned say they are most likely to invest in waste reduction over the next two years. Although 65% plan to invest in employee training on sustainability and 66% in sustainable supply chain management, considerably fewer plan to invest in climate technology (55%) (technologies that are explicitly focused on reducing GHG emissions, or addressing the impacts of global warming) and renewable energy (52%).
Having other business priorities (25%) is the biggest barrier to invest in ESG activity for business leaders surveyed across the region, closely followed by a lack of funds (24%).
According to the survey when it comes to investing in ESG focused projects, it’s perhaps unsurprising that waste reduction is an area many are choosing to invest in. More efficient use of resources, and improved recycling could allow business to cut waste disposal costs and potential enhance brand reputation. It’s also pleasing to see that over half of all the businesses questioned are also planning to invest in a range of other sustainability initiatives.
Given the growing emphasis on sustainability, it makes sense for business leaders to consider this alongside other business objectives.
It’s good to see that, of those businesses that have some knowledge of ESG, many have some form of ESG activity on the cards. A robust sustainability strategy that meets regulatory standards can help to reduce costs and strengthen relationships with current customers, at the same time as attracting new ones.
Head of Mid-Corporate, Eastern Region, Barclays Corporate Banking
To discuss your business requirements and how Barclays can support you, contact us today.
*Source: YouGov ‘News UK Barclays Survey’ April 2024. An online quantitative survey of 1000 business leaders working in businesses with at least 250 employees. Working in all regions of the UK except London. NB Survey size in Northern Ireland 15 businesses.
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