Businesses across the North East have lost some confidence in the their own prospects but report resilience in the face of challenges.
Research from software plc Sage shows only just over half of firms are confident in their own success - showing waning sentiment since March but putting the region ahead of the UK picture as a whole. A survey of 2,005 small and medium-sized enterprises (SMEs) in the UK, including 251 in the North East, found 56% in the region were confident of success vs 53% across the UK more broadly.
The findings represent a 4% decline in the North East mood since March, though 41% of regional respondents expect growth, compared with just 35% nationally. And the number of regional companies reporting energy challenges was at similar levels to those that reported Covid impact during the pandemic.
Read more: Rishi Sunak appointment must 'mark start of real action', say business leaders
Despite the movement, more than half of regional respondents said they were coping with challenges facing their business, with 15% saying they were dealing with challenges badly. Across the survey, firms reported the adoption of technology as the most important response to challenges after cash flow management, with sales and customer relationship tech, production tech and customer services tech among the key areas of interest.
According to the survey, only 8% of SMEs expect to cut back on tech investment in the next 12 months - the lowest of any region in the UK. Sage found 80% of firms intended to continue their current levels of tech investment or increase it.
The research also indicated a link between long term tech investment in the past two-five years and stronger optimism now. North East SMEs that have invested more in tech in the past three years are as likely to have been impacted by energy costs but are more likely to be confident in the future (60%) vs those that did not (51%).
Steve Hare, CEO of Sage: "SMBs have shown incredible resilience over recent months but aren’t invincible. With SMBs turning to technology as a top solution to cope with rising costs, having a robust digital economy is more important than ever. As government considers measures for the Medium-Term Fiscal Plan, they need to provide the right tax incentives so SMBs can continue investing in digital tools to remain competitive.”
The survey was conducted in the wake of changes to the Government's September mini-budget but prior to Rishi Sunak becoming the new Prime Minister.
On news of Mr Sunak's premiership, the chief executive of the North East England Chamber of Commerce, John McCabe, said: "It is crucial that Mr Sunak and his ministerial team listen to business concerns in the North East, and that his appointment marks the start of real action to deal with the significant economic pressures facing businesses and households in the region. Investment in the North East remains vitally important and there must be a renewed emphasis on greater devolution for the region and Levelling Up."
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