Business Survey Headline Statistics
The 2017/18 Leicester and Leicestershire Business Survey was commissioned in August 2017 by the Leicester and Leicestershire Enterprise Partnership (LLEP) and its’ partners. The main objective of the survey is to provide the LLEP and partners with information from the business community to inform strategic planning, decision-making and evidence-based policy and information. Over 1,000 private sector businesses took part in the telephone survey each answering about 70 questions.
Changes to the level of exporting and importing – last 12 months and next 12 months
- While there has not been growth in the proportion of establishments that export locally, there has been a net increase in exporting over the last 12 months. A third of exporters have increased the amount exported (34%), compared with 9% that have reduced the level of exports.
- Similarly, there has been a net increase in the level of importing, with a quarter of importers having increased their level of imports in the last 12 months (26%), compared with 13% that have reduced imports.
- This is set to continue in the next 12 months, with half of exporters planning to increase exports in the next 12 months (49%) and around two fifths of importers planning to increase imports (37%). This compares with 9% and 8% that expect to reduce exports and imports respectively in the next 12 months.
- Compared with 2014, fewer establishments have reported an increase in the level of exports and fewer also foresee an increase in the next 12 months. The trend remains very positive.
Business performance in the last 12 months
- There is a positive picture of business performance in the last 12 months:
- Increased sales turnover, 52%
- Increased profits, 46%
- Increased staff headcount, 30%
- While one in four establishments has increased capital investment and ICT/digital skills spend (both 25%). A third (34%) has started offering new products and services.
- Fewer have reduced their staff headcount (12%) and sales turnover (16%).
- Compared with 2014, however, establishments are less likely to have increased profits.
- Compared with the UK-wide picture offered by the 2016 Small Business Survey findings, local employment has remained more stable, with fewer reporting recent growth but also fewer reporting workforce shrinkage.
- Looking ahead to the next 12 months, seven in ten establishments are anticipating increases in sales turnover (69%) and profits (71%), while a third (37%) are expecting to employ more staff in 12 months time.
- A third of establishments (34%) anticipate increasing capital investment, while slightly fewer (29%) anticipate increasing ICT spend and two fifths (39%) expect to start offering new products or services.
- Manufacturers have reported particularly positive recent trends and are the most optimistic looking ahead.
- Again, while it is a positive picture looking ahead, it is a little less positive than the outlook in 2014, with fewer establishments now anticipating increases in sales turnover, profit, capital investment and new products and services.
- Compared with the UK-wide picture – as provided by the 2016 Small Business Survey – local establishments are more likely to see expansion ahead.
- Whilst the majority of LLEP area establishments are aiming for growth in the next 12 months (65%), most are aiming for steady growth (57%). One in twelve (8%) are aiming for rapid and aggressive growth. The core group of establishments aiming for rapid growth remains unchanged compared with 2014, but fewer establishments this year than in 2014 are aiming for steady growth. Instead they are planning to stay as they are, with this proportion increasing from 24% to 29% of all establishments.
Anticipated change in general business conditions in the area in the next 12 months
- In terms of general business conditions locally in the next two years, a quarter of respondents (27%) believe there will be an improvement, while a sixth (18%) expect a deterioration. However, a significant minority (16%) do not feel able to offer a view.
- Leicester establishments have a more positive view than their counterparts across the rest of the County, with 36% anticipating improvement, compared with 23%.
- While the level of optimism overall is lower than it was in 2014, and the proportion that anticipate deterioration in 2017 higher than 3 years ago, there is also a significant increase in the proportion that do not feel able to offer a view. This highlights the degree of uncertainty with regard to general business conditions locally and, perhaps, nationally associated with BREXIT.
Recruitment and skills shortages
- Around half of all establishments (52%) have recruited staff in the last 12 months. This increases to nearly all establishments with 10 or more staff.
- Just one in five recruiting establishments (20%) has recruited university graduates in the last year (10% of all establishments). This proportion is higher in Leicester (14% of all establishments).
- Just over a quarter of all establishments (28%) have experienced difficulties recruiting staff in the past 12 months, which is a slightly higher proportion than reported in 2014. This includes 10% of those that have not recruited, suggesting that they have tried to recruit without success. More than two fifths of those that have recruited in the last 12 months (44%) have experienced difficulties in doing so.
- The majority of establishments that have experienced recruitment difficulties cite the lack of skills, experience and qualifications among applicants as, at least, one of the causes of difficulties (23% of all establishments).
- Skilled trades are the occupations most frequently mentioned in relation to hard to fill vacancies, although associate professional and technical occupations and personal services occupations are more significant for other services establishments.
- Nine per cent of all establishments have recruited, or tried to recruit, workers who are non-UK nationals in order to overcome recruitment difficulties or skills shortages. The proportion increases to 21% of those who have had recruitment difficulties and is higher than average among Leicester establishments (12%).
- Nearly half of all establishments (45%) have plans to recruit in the next 12 months and it is likely that a few more will recruit even though they have no current plans to do so as a result of staff leaving and having to be replaced.
Skills and Training
- Three fifths of establishments (59%) have arranged or funded training or development for employees in the last 12 months, with two fifths of all establishments (39%) having arranged or funded off-the-job training, and around half (52%) having arranged or funded on-the-job training.
- Compared with 2014, there has been a significant increase in the provision of training locally.
- More than four fifths of respondents providing a response, report finding it easy to find training last time they sought it (85%), which is a higher proportion than in 2014 (73%). Those that have trained have found it easier than those that have not trained (90%, compared with 76%). However, this difference is largely due to the higher proportion of non-trainers that said they were unsure.
- Compared with the UK-wide picture, as provided by the 2015 Employer Skills Survey, despite the increase in training activity, LLEP area establishments remain below average in terms of the provision of off-the-job training.
- No need is the main reason for not arranging or funding training (70%), while very small numbers of establishments say it is not a priority for them, they do not have the financial resources or they are too busy to undertake it, with very few establishments mentioning lack of courses and external courses being too expensive.
- Three fifths of establishments (60%) report skill gaps within their existing workforce. Skills lacking are most likely to be communications (28%), management and supervisory (26%) and technical, practical or job specific (26%) skills.
- The incidence of skill gaps has decreased in the last three years (66% in 2014) and we can speculate that this could be at least partly due to the increase in training provision.
- Communication skills has increased in significance as an area for improvement among the workforce, while marketing and sales skills is less likely to be mentioned this year (22%, compared with 31% in 2014).
- More than half of all establishments (57%) plan to train or up-skill staff in the next 12 months. The main area in which there will be training or up-skilling is that of technical, practical or job specific skills (33%). Communication skills have also increased in significance in terms of up-skilling since 2014, which is likely to reflect establishment needs, as indicated by where skill gaps have been identified.