Northamptonshire businesses have enjoyed another overall strong year of growth with increases in turnover, profitability and employment, despite uncertainty in the wider market, according to a new report.
The annual Northamptonshire Limited study, conducted by financial and business advisers Grant Thornton, analyses the performance of the 100 largest, privately owned companies in the county to provide a recognised benchmark of the overall health of the local economy.
The 2018 report findings, unveiled to more than 100 local businesses at a special breakfast event hosted by Grant Thornton, revealed that combined turnover of the top 100 companies increased by healthy 5.6%, up from £5.6bn last year to £5.9bn.
Profits in total rose by an impressive 17.3% from £352 million to £414 million, although there was a greater spread in performance than in previous years with some companies performing exceptionally well, whilst others found trading more challenging.
Employment amongst the county’s largest privately owned businesses is also on the up with the top 100 growing their combined workforce by 9.7% to 34,026 people. However, following last year’s rise, average salaries fell slightly, down 1.6% to £28,710.
Mike Hughes of Grant Thornton’s Northampton office who presented the findings said: “It’s been an interesting 12 months since our 2017 report. Whilst Brexit uncertainties remain, overall, the UK economy has performed fairly well with GDP rising slowly and unemployment continuing to fall.
“In addition to Brexit, local businesses have had to deal with a raft of new challenges including the introduction of the ‘sugar tax’, a spate of high profile retail failures and the new GDPR rules around data protection.
“Against this backdrop, it’s not surprising that the performance is a little more mixed than we’ve seen previously with 39 of the 100 companies actually reducing profit. However, there have been some real standout performances and overall we should celebrate the tremendous achievement of Northamptonshire companies in delivering another excellent set of results.
“These companies continue to show great skill, resource and commitment to delivering growth in an uncertain market. A significant increase in the level of investment in fixed assets also demonstrates a real confidence for the future.”
The 2018 study also revealed that turnover growth was consistent across companies of different sizes with the county’s largest businesses (turnover greater than £50m) achieving exactly the same 5.6% rise in turnover as SMEs.
Whilst the profit increase amongst larger businesses would appear to be more than three times greater than that of SMEs (25.6% vs 7.1%), this is driven by the exceptional performance of just a handful of very large businesses. Excluding these companies reveals that, overall, the SME’s are out performing their larger rivals.
The Northamptonshire Limited report also analyses the performance of the top 100 companies by sector.
Impressively, all eight sectors reported an increase in profits, highlighting a consistent picture across the board. This implies that the underlying mixed trading performance evident from the report is not a result of just one or two sectors suffering from challenging economic conditions but rather a reflection of the performance of individual businesses. The standout sector was Business Support Services which saw the biggest profit rise of 47%.
The Automotive and Motor Retail sector saw the smallest profit growth of 2.8% which can partly be attributed to weak consumer confidence and a rapidly evolving market with the shift away from diesel cars and trucks to electric vehicles continuing at a pace.
Mike Hughes concluded: “With all sectors turning in a positive set of results alongside some real standout performances, this year’s report demonstrates the overall robustness of the Northamptonshire economy.
“Whilst a number of challenges lie ahead, particularly in relation to the final arrangements over the customs union and ongoing skills shortages, businesses have shown they are able to adapt, identify and seize new opportunities for growth.”
The findings were presented at Northampton Saints Rugby Club and this year’s event included a panel discussion with Kieron Salter from KW Special Projects, Chris McDermott from Cambridge Weight Plan and Hilary Chipping, Acting CEO of SEMLEP.
For a full copy of the Northamptonshire Limited report, please contact email@example.com