Cumbria LEP Business Survey Results 2011 – Cumbria’s Many Small to Medium Sized Businesses Continue to Suffer with the Double-Dip Recession
The recently published results of the Cumbria LEP Business Survey for 2011 reveal a region struggling to come to terms with the mounting pressures of costs inflation shock, reduced consumer demand especially in the local marketplace and increases in unemployment.
The results from the latest longitudinal survey delivered by the Birmingham-based research company BMG mirror the downward trends of the 2010 Cumbria Business Survey especially amongst the majority of Small to Medium sized businesses which dominate the region’s economy.
The survey was commissioned by a consortium led and managed by the Cumbria Local Enterprise Partnership as part of a LEP Capacity Fund project and is the latest study from 8 surveys initiated back in 1998.
A major outcome reveals a reduction in the overall numbers of people employed by private sector companies compared to the same period 12 months ago. The authors estimate around 8,000 fewer people are now employed by the private sector compared to 1 year ago (2010).
Whilst the report re-iterates that the survey methodology has had to rely upon stratified random sampling and hence must be considered estimated numbers, these employment figures appear to correlate with the rising unemployment statistics as reported by Job Centre Plus Nomisweb (1 in 10 claimants claiming unemployment benefit – now far larger than 12 months ago).
The overall view is of a Cumbrian market continuing to shrink with increasing staff costs, a reduced workforce and a tighter more restrictive financial environment.
Upward costs pressure are also anticipated by most Cumbrian businesses surveyed for the next 12 months which, combined with the gloomy outlook predicted by many of the economic experts (OECD, Markit, OBR), austerity measures and potential stagflation (growth stalls and inflation remains dangerously high) the next 12 months look especially difficult for the majority of Cumbria’s SMEs.
This, of course, is not an isolated report with many LEPs around the country conducting similar surveys amongst their business communities including the English Business Survey managed by the Department for Business Innovation and Skills. In many instances these reports have been followed up by further more in depth analysis of the particular problems faced by that region in order that the particular LEPs can improve engagement between the regulators and their businesses or are able to advocate changes to regulations and their applications.
However, small glimmers of hope can be found within the Cumbria report. For instance a small proportion of businesses managed to report “higher” trends over the last 12 months. The principal example regards increases in turnover and profit margins for those companies trading in the greater North West region and with the Rest of the UK rather than reliance upon the local shrinking market. Any opportunity observed by the LEP through this survey, however small, has to be worth the effort of communication to help inform future business planning for 2012/13.
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