BGF Growth Climate Index #2

HS2 is good for British business, according to a survey of senior business leaders carried out by BGF.

The majority (60 per cent) believe that the planned high speed railway that will link London with Birmingham and cities in the North West and Yorkshire, will benefit British business. But in contrast to current plans, 43 per cent believe that it would be better to start with the connections from the Northern cities to Birmingham, and then move on to London, compared to 24 per cent who think it should start in the South.

The second BGF Growth Climate Index polled BGF’s network of board-level directors and chairmen with wide ranging experience across the spectrum of UK and international business, from senior business leaders of high growth small and mid-sized companies to FTSE 100 corporates.

Investment in infrastructure remains a top priority. 58 per cent of respondents claim that improved roads, rail (local and high-speed) and airport expansion would benefit the businesses they work with while 40 per cent would prioritise investment in high-speed broadband.

You can read the report here.

Three quarters (75 per cent) believe that building a third runway at Heathrow is good for British business, although 55 per cent thought that increasing capacity, routes and flights at regional airports was equally or more important. The vast majority (83 per cent) of business leaders are against the Government re-nationalising the railways.

Once again prospects for growth look bright but there were signs of growing caution among the business community. More than half (51 per cent) believe conditions for growth have improved over the last quarter while 52 per cent expect them to continue to grow over the next quarter. This marks a significant drop on the 82 per cent and 78 per cent who answered the same questions in June of this year, perhaps reflecting the recent slowdown in growth of GDP.

The skills gap remains an issue for business leaders, with recruiting and retaining the right talent cited as the biggest factor holding back business growth (28 per cent agreed with this). This was followed by instability in overseas markets (22 per cent) and macro-economic conditions (21 per cent) – suggesting that political and economic turmoil overseas, in Europe, the Middle East and Asia, is of growing concern among the business community.

Stephen Welton, Chief Executive of BGF said: “Small and medium sized businesses are the lifeblood of the economy, bringing much needed jobs and prosperity, but they depend on infrastructure to grow. Working with businesses across the length and breadth of the UK, we see first-hand the importance of investing in world class infrastructure, combining big ticket projects such as HS2 and increasing airport capacity but also ongoing improvements to roads and online connectivity.

“Once again this index paints a positive picture of the UK growth climate where ambitious companies continue to thrive, but there are also concerns on the horizon. Political and economic instability overseas – in Europe, the Middle East and Asia – has leapfrogged access to finance as one of the top issues holding businesses back from growth, suggesting that the challenges of doing business in an interconnected world are increasingly front of mind for UK entrepreneurs.”