| SMALL FIRMS GROWING WELL IN
NOTTINGHAM Nottingham Evening 17th May 2005 |
|
15:17 - 17 May 2005 |
Nottingham firms are bucking the trend by growing at a
faster rate than the rest of the country, according to a Barclays economist.
"Nationally, we have seen the number of medium-sized firms
expanding tail off because of the economic slowdown," said Dr Richard Roberts, head
of research for small and medium- sized businesses.
"In the East Midlands, in every quarter since the middle of last year, the number of
firms expanding has been significantly ahead of the national average."
Dr Roberts said the number of expanding medium-sized firms in Nottingham - those with a
turnover of between £500,000 and £10m - exceed those which were contracting by 7.5%.
But he said there was no obvious explanation, adding: "There is something positive
going on in the local economy which is not reflected in the national trend."
And the number of growing businesses in Nottingham exceeded numbers for the county.
Dr Roberts said Nottingham and the East Midlands contrasted to southern England where
fewer transactions in the property and housing market had caused a slowdown.
"That has led to a degree of outperformance by Nottingham in relation to the the
national average," he said.
The same picture emerged for small businesses in Nottingham, where they outperformed the
national average.
The city has been identified as a regional hot spot for business start-ups, with 2,100
last year; 31 per 10,000 working people.
Dr Roberts said Nottingham had seen strong growth in new businesses but warned this would
lead to a number of business closures later.
"There is no evidence of that at the moment," he said. "Closure rates are
no worse than they were a year ago.
"If you look at the number of businesses set up in the area in the last year or two,
given the tougher economic climate, it is inevitable there will be a rise in closures but
we should not be too alarmed by that.
"Very few will be failures in terms of losing money. They will not be making enough
money."
Manny Gatt, chief executive of Business Link Notts, said: "The sort of issues people
are coming to us about are more about developing businesses rather than related to
survival.
"Growing businesses is crucial for the economy. We are here to help firms start up
and grow."
John Dowson, director of policy at Notts Chamber of Commerce, said its last two surveys
pointed to Notts performing better than the rest of the country.
"Traditionally, Nottingham has performed better than the East Midlands.
"Construction has been doing well although the market is slowing down.
"Nottingham is fortunate in the amount of new development - ongoing and
planned."
Peter Stevenson, regional director of the CBI, said confidence had taken a fall recently.
About 4,000 jobs were expected to go in manufacturing this quarter in the East Midlands,
he said.
Dr Roberts predicted a painful year by 2006 for those linked to the housing and consumer
sector but financial services and business to business services would perform better
because profitability was still strong.
He said the economy would grow at less than 2.5% for the rest of this year and nearly all
of 2006 but pick up at the end.
The fall in the number of housing transactions had steadied, he added.
"Transactions are down by 25% to 30% on a year ago nationally," he said.
"Clearly that begins to have a significant impact on other businesses such as
property professionals, building companies, carpenters and joiners who will notice a
significant change in business fortunes as the year goes on."
Dr Roberts thought the Bank of England would not rush to lower interest rates from 4.75%.
"By the back end of 2006, they will probably be very close to what they are
now," he added.
"It may lower them very slightly over the autumn only to put them up. But I think
interest rates will stay roughly where they are for the next two years.
"While interest rates may dip by a quarter of one per cent, there is little prospect
that they will rush to lower rates."
Dr Roberts said he did not see why the UK economy shouldn't continue to grow at its trend
level or slightly ahead in the medium term."
|
|