Well Happy New Year to you all! I hope you had a great break and got some time to recharge the batteries in-between all the celebrations and excitement. The team here at Trowers has come back full of beans, the buzz in the office is great to see and is doing much to get me back into work mode.
I do find January to be a funny month, business-wise. Whilst there is a sense of new beginnings and looking forward, there is often also some trepidation as to what the New Year will bring. For many sectors December is the key month for their business profitability, with January a time for assessing how their company has performed and seeing how that impacts on development plans. December profits often cushion the quieter first quarter market conditions. The Food and Beverage sector is a prime example of this, with a busy December period essential to see firms through Q1, when trade is traditionally significantly quieter. Many retailers too are in the same boat, with independent retailers and High Street brands alike relying on December takings to cushion lower takings. Some of our largest retailers take as much as 80-90% of their profits in December, carrying losses for many other months of the year.
And despite what might well have been a tough Christmas for some, given how 2023 was a year of persistent high inflation and low consumer confidence, we're seeing positive noises from South West businesses in the latest raft of regional business surveys. Always interesting to read, the latest findings from Lloyds Bank have revealed that 76% of the firms they recently interviewed across our region expect to see more profitability in the coming year, a result that mirrors our own findings at the South West Tourism and Leisure Forum late last year. My colleague Ian Brown hosted the event alongside colleagues at Savills and a poll of attendees there found 94% were optimistic for their businesses in 2024.
Lloyds also found that over a third of respondents wanting to develop their business and 32% looking to invest in training this year. As I've mentioned before, investing in business is a sure sign of confidence, as is training.
All of these encouraging results are great to see and are particularly interesting given the macro-economic and socio-political environment in which South West firms are operating. For our exporters there seems little let up in the ongoing development of post-Brexit regulatory change. It was always going to be complicated, but it's a significant challenge as those selling to foreign markets try to adapt to new trading requirements and, or, look for new markets to focus on. Brexit itself seems like forever ago now, but the impact is still keenly felt. Conflicts pile on the pressure, unnerving markets as they do, and political change is potentially in the offing with a UK General Election apparently looming, and the US gearing up for significant votes this year.
Closer to home however, the Business West's latest Quarterly Survey has highlighted that 71% of firms that they spoke to feel that finding the best talent for their businesses to be a key issue for the year ahead. They reported difficulties in finding suitable staff to fill skilled roles across manual and technical roles, as well as professional and managerial positions. 22% of respondents are in an expansive mood and reported an increase in their hiring of new people. So will 2024 see more of a 'war for talent' across our region? Quite possibly, it seems. On the positive side, we're blessed with some of the country's finest Universities, and we remain one of the UK's go-to destinations for young people who are looking for a good quality of life and exciting career prospects, so we're in a good place to meet the challenge.
So it looks like we've got a busy year ahead but I believe that our South West business community is definitely on the front foot for making the most of it. This was certainly a clear message coming out our "Future of food & drink in the South West - fostering economic growth and sustainability" event last autumn, which we hosted jointly with Taste of the West and Bishop Fleming Chartered Accountants. There seems to be some let up in market conditions, with international trade slowly moving back into positive territory and inflationary pressures easing, which is encouraging, but I think we're all highly conscious of the broader economic outlook remaining challenging.
As we ease into 2024 do keep your eyes peeled for news and events here at Trowers that will help you navigate any choppy waters ahead. As ever we have a packed agenda of events, commentary and analysis that you won't want to miss.
If you'd like to discuss your New Year business plans and chat about how Trowers can help you, do get in touch. Drop me a line here or feel free to call on 07717 335 602 – we look forward to hearing from you. In the meantime, please accept all best wishes from everyone here at Trowers.
