Whilst the economic outlook for London and the South East is good and attitudes within those business communities remains positive, the same cannot be said for northern regions.
The Federation of Small Businesses (FSB) have spoken of a ‘clear divide’ in the level of confidence felt by companies in the South and their Northern counterparts.
Their latest quarterly confidence index, recorded at the end of 2015, showed the North East of England standing at -11 points; far below the figure for the UK as a whole (+21.7).
In the city, the index revealed a score of 25 (the highest since early 2015) which was attributed to rising profits. Of the 144 firms surveyed, 47 percent reported higher gross profit, whilst 21 percent admitted falls. The difference in percentage points was well over double the recording of three months before.
'A clear divide in confidence is now emerging across different parts of the UK, with businesses in the south and in sectors like technology and professional services feeling more positive about 2016,’ said the FSB.
It seems the index is a true mirror to the economic projections for a divided country.
In a separate survey conducted by EY consultancy, it is suggested that while forecasts show good overall growth for the UK (a rise to 2.6% this year from last year’s 2.2%) driven by higher consumer spending, it will certainly be uneven.
The yawning gap between north and south is expected to widen over the next three years with economic output set to increase by approximately 3% in London and only 1.6% in the North-East.
Despite George Osbourne’s attempts to strengthen the northern economy – his promises to devolve power to Northern cities in his ‘Northern Powerhouse’ initiative, the HS2 railway plans and promises that councils can keep more of the revenue from business rates – the EY report suggests that these policies will not bear fruit until 2020 at the earliest:
“From our projections, it’s clear that we don’t expect the government’s northern powerhouse ambitions to have a radical economic impact during our forecast period through to 2018. At best the economic boost will be felt more in the next decade than this one.”
Little wonder then, that northern business communities see only grey skies ahead.