Grant Peggie, Director at British Business Bank, discusses the sectors that are thriving across Yorkshire as inward investment increases across the region.
Yorkshire and the Humber is a fertile ground for investment. With a total population of over 5.4 million people, the region has enjoyed the fourth largest increase in GDP per capita across the UK in the last year, while its cities are also thriving. Leeds alone achieved one of the biggest year-on-year increases in GDP per capita in 2017, with 3.5 per cent growth, as businesses across a range of sectors flourished.
The release of the West & North Yorkshire Chamber of Commerce’s economic briefing for Q3 provides even greater cause for optimism. The report evidences strong growth across Yorkshire and the Humber’s SME community compared to the UK national average, driven by increasing confidence in business, a boom in inward investment, and growth in employment.
The report also highlights a new level of ambition amongst companies and business owners across the region, who are increasingly looking to take advantage of a robust domestic economy and improving global trade.
The opportunity to invest is as abundant as ever before, and this is perhaps most significant across certain sectors which are performing exceptionally well. This includes the service sector, which continues to contribute significantly to employment in Yorkshire and the Humber. Accounting for around 80 per cent of businesses in West & North Yorkshire, this sector consists of a range of significant clusters, including professional and financial services, banking, legal and digital & creative.
The strength of the services sector is perhaps best evidenced by the investor confidence it has been able to attract. The Northern Powerhouse Investment Fund (NPIF), for instance, has already invested significant development capital in service companies since launching the fund in February 2017. Investments include the £100,000 funding package for Blake UK, the Sheffield-based manufacturer and supplier to the TV/AV sector, and £100,000 investment in print machinery specialist Pinheiros. Both deals were facilitated by NPIF – Mercia Debt Finance.
In keeping with the region’s heritage, manufacturing continues to be a key driver of the Yorkshire and the Humber economy. This diverse sector represents approximately 19 per cent of the companies in the West & North Yorkshire region and is a major employer, with over 130,000 people in employment across chemicals and chemical production, medical technology, electrical equipment and machinery. We are also seeing the continuing growth of new innovative companies such as Adventoris, a Huddersfield company which has developed an innovative mobile app platform.
Supporting the growth of these businesses are a range a funding options, which are available for SMEs in various sectors and stages of development, from start-ups to fully fledged enterprises, looking to take their business to the next level. Whether that’s private equity, crowdfunding, or peer-to-peer lending – the options are endless.
British Business Bank’s Northern Powerhouse Investment Fund is one of those funding channels. The £400m fund was created to invest in Northern SMEs and offers businesses an additional choice when it comes to growing their business, providing capital to fund managers, who offer:
Microfinance, covering small business loans from £25,000 to £100,000
Debt Finance, offering larger business loans of £100,000 to £750,000·
Equity Finance, providing early or late stage finance from £50,000 to £2m
Regardless of the route businesses choose to take to access finance, it is pleasing to note that there are a wide range of options are available to businesses in Yorkshire and the Humber and businesses are thriving as a result. By working together and helping to provide the finance growing SME’s need, we will unlock the potential of businesses in Yorkshire and the Humber and wider Northern Powerhouse region.
The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.
Photo Caption: Left to right – Ashwin Kumaraswamy, Mercia, Keith Morgan, British Business Bank, James Clarkson, Adventoris, Mark Wilcockson, British Business Bank