Regional SMEs close to matching London growth
Small businesses across the country are getting close to growth rates seen in London.
Businesses in the UK have often said that they are concerned about the dominance of London when it comes to economic growth.
But while companies in the capital remain ahead overall, a report in the Telegraph shows that some smaller businesses across all regions are not far behind London firms’ success.
The article analyses data from Barclays showing that small business customers in the capital grew by 10 per cent in the first quarter of the year. Yet several other regions are not far behind – an increase of 9.3 per cent was reported in the south-west of England, while a nine per cent rise was seen in the north-west and 8.7 per cent in Yorkshire.
Barclays’ small business clients saw their collective income rise by just over eight per cent in the first three months of the year, marking the highest rate of growth since the bank started compiling the data 14 years ago.
After all, growth was limited to just 2.7 per cent in the same period last year, which the Telegraph says was a result of struggles to build up customer bases again after the financial crisis. Now that recovery is getting underway, companies are reaping the rewards.
Perhaps unsurprisingly, the housing and property sector is the biggest driver of growth, reporting an annual rise in business of nearly 17 per cent.
Manufacturing posted the weakest rate of growth, yet even that industry rose at a rate of 4.2 per cent year-on-year in Q1.
Growth among smaller companies in the UK’s regions is certainly welcome, especially at a time when concern is still rife that London’s economy is expanding much faster than those of other UK cities.
In fact, an EY report published on 28 May found that even though the UK was the biggest destination for foreign direct investment projects in Europe, almost half of those projects were in London and the surrounding area. That was the highest proportion of investment directed to a major city in any country on the continent.