The recent base rate reduction and improved confidence brought about by a new government being in place have resulted in greater levels of confidence across the region. Businesses are cautiously optimistic about the future and we’re seeing more clients seeking finance to support their growth plans.
Head of Mid-Corporate, London and South East, Barclays Corporate Banking
58% of businesses surveyed are looking to expand their business in the next 12 months.
42% of business leaders say recruitment and retention is their biggest challenge.
58% of respondents are confident that they can access funds to support business growth.
Our recent research, carried out with News UK*, shows that the majority (58%) of businesses across the South East – excluding London – are hoping to expand their business in the next 12 months and 52% are confident in their ability to grow. Looking at the national picture, businesses surveyed in the South East are the most confident about being able to access funds to support this growth (58% compared to 50% for the UK average). At 43%, confidence in the UK market is less among South East businesses, although still higher than the national average (40%).
Just over one in four business respondents across the region see recruitment and retention as their biggest challenge, followed by an increase in costs (40%) and economic instability (39%). Despite these challenges, business leaders in the South East say they are either making good headway or are meeting all their goals in developing their business through technological innovations and diversification (62%). More than half said they plan to invest in new growth strategies over the next 12 months.
Now that the general election has passed, businesses are starting to feel more confident – although there is still some uncertainty regarding what new policies, if any, will be implemented. Easier access to London and Europe, as well as the sheer diversity of industries across the region, tends to open doors to opportunity and growth.
Head of Mid-Corporate, London and South East, Barclays Corporate Banking
With recruitment and retention being highlighted as a key issue by businesses, it’s perhaps not surprising that those questioned regard developing staff skills to meet future needs (88%) as the most important factor when it comes to growth strategies. Encouragingly, almost three quarters of South East businesses say they have staff skill development programmes in place.
“Many of our clients say that recruiting and retaining talent is a key factor in their success. As such, it’s good to see that developing talent – and therefore investing in people – ranks highly among respondents,” says Irana. “Businesses in the South East often have to compete with London for talent. To improve people retention, it’s important to really understand the labour market and think about how to make the best use of existing talent. For example, clients are increasingly focusing on apprenticeship schemes.”
We’re pleased that so many businesses are confident they can access funds to support their growth. We aim to work closely with our clients, spending time getting to understand their challenges and objectives so that we can support them with the financial solutions they need to help achieve their ambitions.
Head of Mid-Corporate, London and South East, Barclays Corporate Banking
86% of businesses surveyed say digital transformation is key to their growth.
73% of businesses feel equipped to use data to understand and respond to consumers' behaviours and experiences
24% of those questioned said AI is not a business priority.
With nearly nine out of ten business leaders questioned across the South East recognising digital transformation as key to business growth (just behind developing talent), it’s encouraging to see that two thirds (66%) of businesses in the South East said they are currently undertaking or have completed digital transformation programmes – the highest reported percentage in the UK. Using digital tools to improve customer service (62%), remote working (58%), and automation (55%), are the main ways in which businesses in the region say they’re embracing digital.
The integration of data and artificial intelligence (AI) into business is increasingly being viewed as important when it comes to streamlining processes, reducing costs, and gaining insights to support decision-making, among other things. It’s good to see that three quarters of businesses surveyed say they have a good understanding of the role data can play in improving customer experiences. Similarly, 73% say they’re equipped to use data to do this.
In terms of incorporating AI within their business strategies, respondents who don’t already use AI in their business indicate that not understanding its benefits (27%), employee skills gaps (27%), and AI not being a business priority (24%) are the main barriers to its use.
Our clients are increasingly investigating how automation can improve their efficiency. Although not investing heavily, we’re seeing law and accountancy firms considering AI for the more process-driven elements of their businesses. SMEs are often better placed to capitalise on AI given their flexibility, although they tend to be at the early stages on the AI journey, with many not yet having started. Of course, it’s important to always remember that these technologies provide the most value by supporting – not replacing – your existing strategies and people.
Head of Mid-Corporate, London and South East, Barclays Corporate Banking
Approximately three quarters of businesses surveyed in the South East have started their sustainability journey (76%), and a similar number say they have an awareness of or are familiar with Environmental, Social, and Governance (ESG) as a business topic (74%). ESG is a framework that helps businesses understand and measure their impact on society, the environment and how transparent and accountable it is. Of those, questioned that have started the journey 58% report either having a well-established ESG approach in place or are currently implementing one.
A large majority of businesses surveyed across the South East have identified waste reduction (75%) as a key sustainability investment area – this of course makes sense, given the associated cost reduction opportunities. Other likely areas for investment over the next two years include providing employees with sustainability training (65%), sustainable supply chain management (63%) and renewable energy (58%).
For those businesses questioned in the region, the main barriers to investing in ESG orientated projects are a lack of clear return on investment (23%) and a lack of expertise or dedicated resources (24%). A fifth also cite a lack of funds and difficulty measuring the impact of ESG activity.
These statistics are encouraging, particularly given the continued importance of ESG and sustainability among regulators, investors, other businesses in the supply chain, customers and employees. The South East includes Kent, the ‘Garden of England’ and a key region in terms of food production, business leaders in the South East should keep abreast of local ESG activities and strategies and the ways in which sustainability can support growth initiatives." says Irana.
Understanding how you can apply ESG-focused strategies to your business isn’t always clear cut. To help make this easier for companies, Barclays has partnered with SaveMoneyCutCarbon (SMCC), a digital aggregator that provides a marketplace focused on sustainability. SMCC offers products, solutions and useful resources to businesses seeking to reduce their carbon footprint.
Head of Mid-Corporate, London and South East, 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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Applying ESG focused strategies to your business might not be straightforward. To support businesses around the UK, we’ve partnered with SaveMoneyCutCarbon (SMCC) to provide a library of environmentally focused content to give guidance on key themes and challenges wherever you are on the ESG journey.
