Prospects for business

Everyone around the table was in complete agreement. It had been a truly tumultuous year – the likes of which we are unlikely to ever see again.

But the question now was this: how do Shropshire businesses pick their way through the ever-changing political landscape to put themselves in the box-seat for post-Brexit prosperity?  

An eclectic range of businesspeople gathered at The Haughmond in Upton Magna to tackle this – and many more issues – in the latest round-table forum organised by law firm Lanyon Bowdler.

From food producers to financiers, they all had one thing in common – they played a high-profile role in the 2016 Shropshire Business Awards, known as the ‘Oscars’ of the local economy.

Laura Parkinson of Lanyon Bowdler, who chaired the debate, kicked things off. “It’s fair to say that this year has been truly tumultuous.

“That’s why it is more important than ever that Shropshire businesses don’t hide their lights under a bushel, and demonstrate what they can do, and what they are all about.”

Shropshire Chamber of Commerce has been surveying the local business community in some detail this year, both before and after the Brexit vote.

Chief executive Richard Sheehan said: “There is no doubt that uncertainty is driving a certain lack of confidence right now.

“People are driven to distraction by the threats that we keep hearing about, which may or may not come through, like the continued impact of Brexit on the currency markets.”

He said the chamber’s latest quarterly economic survey painted a picture of a Shropshire economy which was not unlike that of 2009, when recession was threatening to bite.

“Investment has been put on hold in some instances by companies who feel it is not quite right at the moment.

“We are facing extremely uncertain times with lots of bumps in the road, and it is important now that Shropshire businesses work together to get through it.

“We have to roll our sleeves up, get on with it, and not talk things down - if you keep being told you are ill, that is eventually how you will start to feel.

“When things kick off round the country, we never seem to see really huge peaks or slumps in Shropshire. We tend not to get the sort of boom and bust scenario that is seen in places like London. Our movement is much slower and more progressive, and we tend to be more consistent.”

October’s pricing battle between retail giants Unilever and Tesco, was symptomatic of the kind of stand-off we are likely to increasingly see among companies which are vulnerable to the international exchange rate fluctuations, the panel agreed.

But did the decision by Bank of England governor Mark Carney to cut interest rates in the wake of the Brexit vote merely fuel the panic and concern?

Not entirely, it was felt, but Barclays’ corporate banking director for Shropshire, John Pitchford, said: “It seems to me that people were totally unprepared for the Brexit vote.

“There is a real appetite among clients right now to talk about Brexit, but not a lot of information out there. And the information that is available is giving out conflicting messages.

“But there is still lots of positive news out there, and companies see the current situation as an opportunity to perhaps refresh their supply chains.”

Some Shropshire companies are already changing their focus, and structure, in readiness for what the future holds.

Richard Cooke, a director of 2016 Shropshire Company of the Year, Orchard Valley Foods, based in Burford, said: “We are a food ingredients business which is a net importer from mainland Europe, so the current situation has a major impact on our cost base through the exchange rate.

“However, it has also given us an opportunity to sell back into Europe now, which is something we were struggling to do 12 months ago.

“I believe you can only try to manage what you know. We should limit worrying about threats to no more than a quarter of our time in the boardroom, and spend the other three quarters looking at opportunities which this could bring.

“The ability and appetite to respond quickly to change and take advantage of the new world is what really matters in the current environment.

“And remember, the weaker pound has made it cheaper for buying into UK business, and when it comes to merger and acquisition opportunities, everybody is looking for a bargain!”

On the commercial property front, Praveen Chaudhari from Lanyon Bowdler said there was still a strong appetite for deals. “There was a knee-jerk straight after the Brexit vote, but it now seems to be business as usual – there is no lack of confidence in the market, the talk is far more about prices.”

Ah yes, prices. And the issues around how much money we all have to spend.

Paul Gossage from the Ironbridge Gorge Museum Trust brought a tourism-related perspective to the debate, after Kirsty Smallman from Wellington-based J&PR asked whether it had benefited from a rise in stay-at-home holidaymakers this year.

“People are still coming, and still spending, but they are being a little bit more prudent, and cautious,” he said. “We need to be working particularly hard to promote the attractions of Shropshire at the moment.”

He said the museum was also keeping an eye on its own funding streams, with potential changes to the long-term way it receives its money. “We have to look at our business models, and consider other sources of income.”

Skills was next on the agenda. It’s a topic which has taken up a significant amount of time at every one of the Lanyon Bowdler forums over the past couple of years – and this was no different.

Businesses expressed concerns at the fact that Shropshire’s low-wage economy was not always able to attract the sort of high-skills jobs which make young people want to stay.

And it was felt that much more work needed to be done to dispel the myths that jobs in manufacturing meant working in some kind of primitive ‘black hole’.

This is not just an issue with young people, but with parents, whose perceptions of engineering and manufacturing careers have in some cases become stereotyped, and outdated.

Richard Cooke said: “We spend a great deal of time rowing our own middle managers. That way they have the biggest influence on our business.

“To have young people that know the culture from day one mans you are onto a winner.”

Orchard Valley Foods employs 70 people, and Richard said the company had put over a quarter of its staff through some form on managerial or personal development training programme in the past 18 months.

Jude Robinson from GWR Fasteners in Oswestry echoed the view that it was ‘a struggle’ to recruit high-end skilled people with the required experience.

“On the whole I do feel positive about the future, though. If you have a passion for what you do, and you can pass that on to young people and pay them well, they will be loyal.

“Young people are much more digitally-savvy too, so having them as part of your business will shake things up a bit.”

The panel expressed concerns that teachers still measured young people primarily on their academic skills, rather than their vocational potential.

It was felt that, until curriculums change to reflect the need to engage much more closely with business, things are unlikely to change.

And that is a battle which can’t be fought locally; it needs to be taken right to the top of Government…

Jude Robinson added: “There is still this view that people have to go to university to be successful, when they do not.

“They need to learn much more about life experiences, and ways of communicating and connecting with people – that’s the most important thing.

“We need to get rid of all these preconceptions that it is just about money – people want to feel a sense of worth.”

The view of the panel was that, in general terms, young people are ahead of the game when it comes to technology, but lagging behind when it comes to interpersonal skills.

Which brought us neatly to the last major talking point – the digital revolution, and the frustrations which many companies across Shropshire feel about the IT infrastructure.

Dave Wyatt from logistics and warehousing company 3PL UK said the hit-and-miss broadband service in the county was threatening to impact on his business ‘massively’.

“It needs to be a lot better. We need connectivity at all times in our business. When I’m out and about across Shropshire, I often lose contact with the office and this is clearly not good enough in today’s world.

“Our clients are at the cutting edge, so that is where we have to make sure we are too.”

The mobile phone coverage across Shropshire was also described by the panel as ‘a nightmare’, and although there are promises of a much improved service by 2020, it was unanimously acknowledged as one of the county’s major economic weaknesses right now – and a top priority.

But we couldn’t end the forum on a downbeat note, so delegates were asked to round off the discussion by highlighting some of the many things that are good about working in Shropshire.

The list – and happily it was a long one – included the work-life balance, the fantastic environment in which to live, the central location which is well connected to the transport network, and the way in which local companies are resilient to the challenges they face.

Laura Parkinson said: “The message is clear. There is no need to go the big cities for quality businesses.

“We have a well joined-up business community in Shropshire, with opportunities for growth, and lots of help and support at hand.”

 

THE ROUND-TABLE LINE-UP

• Dave Wyatt from 3PL UK, Kinnerley
• Mark Evans of Beaumont Financial in Oswestry
• Jude Robinson from GWR Fasteners in Oswestry
• Mark Freeman of Henshalls insurance brokers, Newport
• Paul Gossage from the Ironbridge Gorge Museum Trust
• Andrew Pegg, John Merry, Laura Parkinson and Praveen Chaudhari of Lanyon Bowdler
• Richard Cooke, director of Orchard Valley Foods, Burford
• Carl Jones, editor of Shropshire Business
• Richard Sheehan, chief executive of Shropshire Chamber of Commerce
• Kirsty Smallman, from J&PR in Wellington
• John Pitchford, head of Shropshire corporate banking, Barclays