Title: GM Business Survey – Key findings Presentation to: Manchester Business Survey Seminar Andrew Graves, Managing Director, TBR 13th December 2016

Overview Key survey findings for GM Business growth themes: Summary Recent high performers Workforce/skills Internationalisation Business Support Innovation Summary NB. This summary compares key findings from 2016 with the previous study (2014). Data from 2016 is marked in dark blue, whilst comparable data from 2014 is represented with light blue text.

Key findings for GM (1) Business Outlook Looking back - business confidence has been relatively strong Employment growth higher than previous years (31% of firms vs 26%) Strongest sectors Turnover growth higher than previous years (50% of firms vs. 43%) Looking forward - confidence in growth prospects higher than last year Over one third expect employment to grow (35% vs 30%) Most optimistic sectors See Key on slide 14

Key findings for GM (2) Growth drivers Growth barriers Products and services (47% vs 57%) Workforce/skills (45% vs 48%) Business location (26% vs 27%) Growth barriers Top three barriers are: Lack of staff or skills (30% vs 24%) Access to markets or sales opportunities (27% vs 24%) Accessing finance (stable at 22%) Fewer firms identify low productivity and poor business location Persistent top two

Recent high performers Definition firms with >20% growth in either employment or turnover in last 12 months More likely to operate in invest in training their workforce (84% vs 70%) trade internationally (30% vs 22%) access business support (53% vs 38%) to be involved in a range of innovation activities (90% vs 78%)

Workforce/Skills A key business driver For whole GM economy but especially firms >50 employees Hard to fill vacancies affect 14% of businesses (stable through time) Most affected sectors: 73% provide some form of training Training delivery mix changing over time Apprenticeships rising slowly (22% vs 20%) Apprenticeships most prevalent in One fifth of firms offer paid work experience/internships One quarter offer unpaid work experience/internships One quarter have IiP or are working towards

Profiling skills active businesses Definition provided staff training in past 12 months; having a staff training plan/budget and offering work placements/internships Less likely to be in More likely to: have IiP and offer apprenticeships experience hard to fill vacancies identify skills as a growth barrier have innovated in last 3 years want to develop trade links accessed business support and plan to do so in future

Exporting An increasing exporter base (20% vs 12%) Key sectors: Comparable with national picture (19%) Key sectors: Markets

Profiling exporters Employment nor age impact likelihood of exporting Key export locations: Exporters; Expect continual growth in turnover and employment. Are more likely to report previous and to expect future employment growth in excess of 50% view continued EU membership as being critical to their business (35% against 17% of non-exporters) be innovative Are less likely to have faced business challenges Are committed to seeking further opportunities to improve their business performance

Business Support Awareness of Business Growth Hub higher (43% vs 31%) Sectors most likely to use GH Two-fifths accessed some form of business support Some observed changes in the business support mix (more from accountants/lawyers and banks) Key drivers of business support; Increase sales through marketing General business growth and advice Developing or expanding workforce A rise in use of mentoring (20% vs 9% in 2012) Three quarters of firms report increasing costs 17% sought finance in prior 12 months – though more are now seeking it for growth than working capital More than one third experienced difficulties raising finance

Profiling business support users Business support users are: Over-represented in Are more likely to: Grow in turnover terms both in last 12 months and expected over next 12 months Provide staff training Offer apprenticeships Trade internationally Undertake innovation activities

Innovation Four in five GM businesses undertake some form of innovation (80% vs 66%) Low levels of understanding and take up of tax incentives Two thirds said they do not understand R&D tax incentives 10% said they understand and use them Further insight into innovators: Those accessing knowledge through Unis 18% of GM businesses and on the increase Are more likely to employ >50 and to export Are more likely to be in Those making major changes to structures/processes Over one third of businesses up from 22% More likely to seek business support More likely to be in

Summary Most prevalent innovation activities: Confidence is relatively buoyant and prospects good Impact of Brexit risk/uncertainty needs to be considered Many indicators of positive trends Higher proportion of firms exporting, innovating, training, using business support But an ongoing need to confirm them Some persistent barriers to growth – skills/staff and access to markets Evidence of some interesting changes of behaviour Examination of key themes delivers greater insight Characteristics of growth businesses: they are more likely to export, develop staff, innovate and take advice Most prevalent innovation activities: investing in plant, product/services development, innovation training

Key to sector symbols Business, Finance and Professional Services Construction Creative & Digital Health & Social Care and Health Innovation IT & Telecommunications Logistics and Transport Manufacturing Retail and Wholesale

And finally… Thanks for listening Further information Andrew Graves, Managing Director, TBR andrew.graves@tbr.co.uk 07966 582133 @tbr_online