Although some businesses are waiting to see what the coming months will bring, for example in terms of new government policies, we’re seeing far more demand for lending compared to 12 months ago. There is a decent amount of activity and appetite to borrow across the region, with several businesses either working on their expansion plans or engaging in strategic mergers and acquisitions.
Head of Mid-Corporate, South West, Barclays Corporate Banking
60% of respondents are confident in their ability to grow their business.
73% of those surveyed have talent development programmes in place.
22% questioned say a lack of access to finance is stopping them from expanding over the next year.
Six in ten companies across the South West are confident in their ability to grow their businesses successfully, and 55% plan to expand over the next 12 months, according to our research, carried out in conjunction with News UK*. This paints a fairly positive picture for the region, particularly given that only 43% have confidence in the overall UK business market, and 53% believe they’ll be able to access funds to support their growth.
Just over half (51%) of business leaders across the South West say they are looking to invest in new growth strategies within the next 18 months to two years, and 42% are making headway in developing their business through technological innovations or diversification. With developing talent to meet future needs (90%) seen as the top priority for growth, it’s positive that the majority (73%) have staff development programmes in place.
A lack of access to finance (22%) and confidence in the market (18%) are the two biggest barriers stopping businesses in the region from expanding over the next year.
In terms of access to finance, the good news is that Barclays has an appetite to lend, says James. “By building long-term relationships with our clients, we really get to understand their challenges and ambitions, and we’re here to support them with the right financial solutions to help them achieve their goals.”
The muted lack in confidence may be related to a ‘wait and see’ attitude in terms of how supportive the new government will be of business. On the flip side, if interest rates drop as expected more businesses will be more confident in their ability to borrow funds to support their plans to grow.
Head of Mid-Corporate, South West, Barclays Corporate Banking
Staff recruitment and retention is the biggest challenge for just over half (51%) of businesses across the region, while slightly smaller numbers are worried about economic instability (45%) and increased costs (43%). This is a slight deviation from the national average, which shows increasing costs is the biggest challenge for 47% of all businesses.
Many of the businesses we work with suggest that retaining talent is a concern, so it’s good to see that developing talent is high up on the priority list. Irrespective of industry, staff are of course fundamental to success and it’s imperative that businesses continue to invest in their people.
Head of Mid-Corporate, South West, Barclays Corporate Banking
59% of businesses surveyed have started or completed digital transformation programmes.
82% of respondents said embracing digital transformation was important to grow their business.
25% of those questioned said AI is not a business priority.
Business leaders from our survey in the South West say that embracing digital transformation (80%) is the second most important factor for business growth behind developing talent, and over half (59%) have either completed or started their digital transformation programmes. This includes introducing remote working (72%), making use of digital tools to improve customer service (68%) and using data to make better choices (58%).
Encouragingly, 68% believe they have a good understanding of the role data insights can play in responding to consumer behaviours and improving experiences. However, just 58% say they’re equipped to use data in these ways.
These statistics support what we’ve heard from clients. Many want to undergo a digital transformation but say that a lack of skilled talent often stands in the way. Similarly, many want to use digitisation to improve productivity, but costs can be a major factor. It’s important to remember that a digital transformation programme is a long-term investment. Our goal at Barclays is to help businesses with the right package to meet their needs and strategic ambitions.
Head of Mid-Corporate, South West, Barclays Corporate Banking
In terms of AI, almost a third (30%) regard employee skills gaps as the biggest barrier to adoption, although a quarter don’t think it’s a business priority. Similarly, 22% cite regulatory issues and a lack of understanding of the benefits as barriers.
Artificial intelligence (AI) continues to demonstrate its potential to transform organisations across various industries by helping to drive efficiencies, personalise experiences and develop new products, among other things. If they haven’t done so already, businesses may need to start thinking about how they can adopt AI within their growth strategies.
Broadly in line with the national picture, two thirds (76%) of businesses in the South West have started their sustainability journey – and the same number report either being aware of or familiar with Environment, Social and Governance (ESG) 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.
Measurement of ESG criteria could differ widely from business to business, however. Just over a quarter (26%) say that they know ESG very well – the highest across the UK regions, where the national average is 19%. Of those questioned that have at least some awareness of ESG, a third (34%) have a well-established approach embedded in their business and a further 29% are just getting started or are in the process of planning and developing their strategies.
It’s good to see that over half of businesses surveyed in the South West have some form of ESG activity in progress on the cards. A well-defined strategy consistent with regulatory requirements could help to mitigate risk, enhance long-term sustainability, improve reputation, strengthen relationships with existing customers, employees and investors and attract new ones.
In terms of business investment, business leaders across the region are most likely to look at waste reduction (71%) over the next two years, while 65% plan to focus employee training on sustainability. 58% expect to invest in sustainable supply chain management and climate technology, (technologies that are explicitly focused on reducing GHG emissions or addressing the impacts of global warming). Interestingly, only 54% of respondents are likely to invest in renewable energy.
Thinking about ESG and sustainability, the barriers that have stopped businesses from investing in actions to improve sustainability further in the South West are insufficient funds (27%), followed by other business priorities (24%).
With many businesses in the South West looking to invest in ESG focussed projects, it’s unsurprising that waste reduction is an area many are choosing to focus on. This this can help reduce costs and give businesses a pricing advantage. 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, business leaders should keep this front of mind alongside other business objectives.
To help you overcome some of the barriers to progressing an ESG agenda, it could be a good idea to see what other businesses on a similar sustainability journey are doing. A sound business plan is vital to accessing the available financing, so speak to your relationship director to find out more about the value that ESG can offer and how we could help to develop your ESG strategy.
Head of Mid-Corporate, South West, 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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