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Regional Insights
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2024 Outlook: North
Grasp hold of the future.
See the big picture
While a general election looms and agendas can change, I’m cautiously optimistic that the North will continue to be a strong point of focus for new investment and growth in 2024 and beyond.
Head of Mid Corporate, North, Barclays Corporate Banking
Attracting investment
It was pleasing to see the North getting more of the attention it deserves last year and I’m hopeful this will continue in 2024 – whatever the result of the general election. Of course, a lot of the media noise about the region has centred on HS2, but I think that the real infrastructure issue is better connectivity within the North itself. We wait to see whether investment will now be redirected to much-needed improvements to the region’s transport network, as promised – as well as to our digital infrastructure.
The chancellor’s announcement of eight new investment zones across England, the majority of which will be in the North, should provide businesses with some welcome tax and tariff benefits, and we’re beginning to see some traction from the freeports in Teeside, the Humber and Liverpool.
Nissan’s reaffirmed commitment to the northeast through up to £2 billion of new investment in its electric vehicle plant in Sunderland – along with the likes of Boeing in South Yorkshire and BAE Systems in Cumbria – should continue to provide opportunities to smaller businesses across their supply chains1. Meanwhile, we’re seeing plenty of new production houses and digital businesses springing up around the creative and media centres around the BBC in Salford and Channel 4 in Leeds, along with a buoyant professional services and private equity ecosystem, while the emergence of Newcastle United FC as a major, Saudi-backed Premier League force has been a boost for the city’s hospitality sector.
Adapting to the skills shortage
While it’s exciting to see new investment and growth across most sectors in the North, workforce challenges will continue to be a key issue for businesses in the year ahead, with quality staff at a premium. Many of our clients are finding it difficult to fill vacancies, particularly in the manufacturing sector and outside the major cities. Businesses will need to deploy innovative solutions to attract talent and retain their best staff, such as teaming up with schools, rewarding long service, finding ways to make jobs more rewarding and giving employees more of a say in the business.
Many of our clients have really upped their game in recent years and now offer much more inviting and modern working conditions for their staff, but factors such as affordable housing, good schools, a decent transport network, low crime and inviting high streets and leisure facilities in the surrounding areas can make it challenging to attract a suitably skilled workforce. However, ESG factors are clearly a priority for much of the younger generation and businesses that can demonstrate a proactive attitude towards making their operations as sustainable as possible could gain the upper hand in attracting staff – and of course customers too.
When money comes into the North it has to lift the whole region up. There’s a danger that there will be an ever greater concentration on the big cities and the towns will get left behind.
Head of Mid Corporate, North, Barclays Corporate Banking
Building on resourcefulness
Although high energy costs and inflationary pressure have eased a little, consumers are still feeling the pinch and will likely be driving up wage costs in this highly competitive skills market. Those businesses that have yet to pass on higher costs on to their customers will continue to see margins squeezed. Deciding when and if to increase prices will always be a difficult decision, especially with higher borrowing costs likely to be an issue for some time to come.
This underlines the importance of knowing your margins and cash position and focusing on operating as efficiently as possible, rather than worrying overly about what the competition is doing on prices. Businesses need to be resourceful and listen to what their customers want.
At the same time, having seen the efficiency benefits of investing in automation, many businesses say they are now looking for new markets and developing new products to find new customers. Rather than automation destroying jobs, we’re seeing lots of businesses reskilling staff and redeploying them into different parts of the business. I think it’s vital to think creatively and develop your valuable staff in this competitive market. Businesses will also need to find new ways to optimise their use of available space, given the intense competition for warehousing in particular.
Key takeaways
Make the most of levelling-up
Keep on top of incentives available through the region’s new investment zones and freeports, as well as the supply chain opportunities of new private sector investment.
Redeploy your people
Automation may be reconfiguring your workforce needs, so it’s vital to be upskilling your people into more productive roles so you don’t lose them in this competitive job market.
Don’t forget the basics
In the face of intense pressure to pass on higher costs to consumers, businesses should be very clear about their cash position and think pricing through carefully.
Keeping fraud front of mind
Fraudsters are as active as ever, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.
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