Planning is key to business survival
Apr 9 2008 by Andrew Mernin, The Journal
It is time for The Journal’s latest Business Barometer, examining business sentiment and confidence across the North East. Once again we have linked up with Newcastle Business School, part of Northumbria University, to survey key executives at the region’s biggest companies, as listed in our Top 250 publication. As the region battles to shake off the doom and gloom that has dogged financial markets across the world in the last six months, Andrew Mernin reports.
WITH the region still smarting from the Northern Rock crisis and global financial turmoil continuing to dent customer confidence and profits, there’s no doubt the North East – like the rest of the UK – faces an uncertain future.
However a region which has soared from the ashes of great heavy industries like mining and shipbuilding is unlikely to let a little thing like an impending recession dampen its spirits. And so our Business Barometer proves.
We asked companies from a vast range of sectors whether worldwide financial turmoil had affected their business, and almost half answered “Not at all”.
And, despite the threat of a downfall in a number of key UK markets, almost 70% of business leaders said they were expecting turnover to increase in the next 12 months.
Meanwhile, our jobs market is also expected to swell, with more than 40% of employers expecting to boost their workforce in the coming year. We spoke to three business leaders about their own experiences in the tough economy and their hopes for the next 12 months.
Sunderland social housing specialist Gentoo is well-equipped to navigate through the choppy seas ahead according to deputy chief executive Andrew Taylor. The firm, formerly known as the Sunderland Housing Group, sells and rents properties and so is likely to be at the forefront of any upcoming turbulence in the housing sector.
Mr Taylor believes the company will survive the tough economic climate because it has planned ahead.
He said: “We currently have sufficient funding already in place that we can use for our future developments so in the short-term we are protected from the negative influence (of trouble in financial markets). Looking beyond that, if we weren’t protected or if we wanted to raise additional funding, its fair to say that the underlying position is that we would find it very difficult to tap into more funding.”
Meanwhile, the housing boss acknowledges the negative mood which has engulfed the region’s business community in recent months.
“The market is certainly more pessimistic than optimistic. Northern Rock has had a significant psychological effect because of it being located in the North East and because of it being one of our biggest companies. We are all saddened by the fortune that it has suffered. There is also the media’s impact – across the country it continues to poke the prospect of a financial meltdown which is having an impact on consumer confidence.”
In terms of improving the region as a competitive place to do business, for Mr Taylor it is our transport infrastructure which should be top of the agenda.
He said: “The transport infrastructure is crucial because we need to nurture a climate which encourages business leaders. Also, we don’t provide an environment where leading business innovators want and choose to live. We need top-end housing, art and culture, research facilities and entertainment.”
Vidar Engen, director at Findus Foods, said: “We have seen growth in the UK and expect to grow 17% year on year. We think we are going to grow our revenue by around 25% in 2008 and we are optimistic about the future. We are always looking at export markets. If people have less money to eat out they will spend more on everyday groceries like frozen food.
“The market place in frozen foods has been in decline in the last few years so that is the biggest boundary to us growing. Another issue we have had is finding skilled labour to work for us.”
