Yorkshire & Humber business activity contracts for fourth month running, but downturn cools

Tess Egginton
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Yorkshire & Humber business activity contracts for fourth month running, but downturn cools

The headline NatWest Yorkshire & Humber PMI® Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – signalled a fourth successive month of falling private sector output across the region.

However, having risen to 48.4 in November, from 45.2 in October, the headline index pointed to a contraction in activity that was modest and the weakest seen over the current sequence of decline. According to panel members, subdued demand conditions led output volumes to shrink, with the recent completion of projects and low client confidence reportedly restricting sales growth.

The seasonally adjusted New Business Index remained in sub-50.0 contraction territory in November, but rose to a four-month high, signalling a slower deterioration in demand for Yorkshire & Humber goods and services. Panellists commented on subdued market conditions, in part due to weaker client confidence.

As has been the case throughout 2023 to date, the trend in new business in Yorkshire & Humber was weaker than seen for the UK overall.

Private sector businesses across Yorkshire & Humber remained strongly optimistic towards the 12-month outlook for activity in November. Furthermore, the level of positive sentiment strengthened and was above the UK-wide average.

Expectations of greater new orders underpinned growth forecasts, in addition to new product launches and marketing initiatives.

The seasonally adjusted Employment Index moved back into expansion territory during November, posting above the 50.0 mark for the first time since August to signal renewed job creation across Yorkshire & Humber.

Increased workforce numbers locally contrasted with a fractional drop at the national level. Additional staff were recruited in line with business requirements, anecdotal evidence showed.

Companies in Yorkshire & Humber reported a further reduction in the amount of work pending completion midway through the fourth quarter. The decrease in outstanding business was sharp, despite easing from October’s near three-and-a-half-year record, and among the fastest seen of all 12 monitored parts of the UK. Operating expenses faced by private sector companies in Yorkshire & Humber rose in October amid reports of increased wage costs. That said, the rate of inflation slowed to a 39-month low. According to anecdotal evidence, pressures were alleviated by reductions in raw material prices.

Yorkshire & Humber firms’ operating expenses rose at a sharp and accelerated pace during November. According to respondents, greater insurance fees, wage pressures and supplier price increases led to steeper cost rises. The rate of inflation was the quickest in four months and broadly in line with that seen for the UK overall.

Private sector businesses in Yorkshire & Humber raised their prices charged once again in November, reflecting firms’ efforts to protect margins due to further increases in costs. The extent to which selling prices were raised was strong and the greatest since July.

That said, the local rate of inflation was among the weakest seen across the monitored parts of the UK, with only Wales, the North West and Northern Ireland posting slower rises.

Malcolm Buchanan, Chair of the NatWest North Regional Board, said: “The direction of travel was positive in November – the downturn in business activity once again lost momentum. However, Yorkshire & Humber continues to lag behind the UK as a whole, which moved back into growth territory for the first time since the summer.

“Disappointment on the output and demand front is being offset by positive movements in other areas, as businesses grew more optimistic towards the outlook for the next 12 months. Subsequently, we saw firms step back into hiring mode, as employment rose for the first time since August. It seems that companies do not expect the current weak patch to persist for long in 2024.”

Urban logistics scheme reaches practical completion at Leeds Valley Park

Tess Egginton
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Urban logistics scheme reaches practical completion at Leeds Valley Park
The Leeds Valley Park speculative industrial development, which fronts the M1 and M621 motorways, has reached practical completion with units now ready for occupation. The scheme, delivered by Caddick Developments and funded by Greater Manchester Pension Fund (GMPF), comprises 300,000 sq ft of warehouse space across six units, ranging between 25,000 and 70,000 sq ft. CBRE, Carter Towler and Avison Young are marketing the urban logistics scheme on behalf of GMPF.  Danielle Raunjak, Associate Director, CBRE Leeds team, said: “The Leeds Valley Park scheme is set to become a key strategic logistics site for the city and sector. The development benefits from being close to major motorways linking the north, south, east and west and will also provide major local employment opportunities.  “There continues to be a healthy level of demand for well-connected, mid-box developments and Leeds Valley Park will hugely contribute to the growth and success of the industrial and logistics market of Leeds and West Yorkshire.” Kevin Etchells, Head of Real Assets, Greater Manchester Pension Fund, said: “Leeds Valley Park is a best-in-class scheme with high ESG credentials which offer an attractive proposition for occupiers looking to prioritise sustainability and future-proof their operations. “The development delivers much needed warehouse space for the continued growth and success of the West Yorkshire market and economy. We look forward to welcoming tenants over the coming months.” Rob Oliver, Principal, Avison Young, said: “We have been delighted with the interest shown to date in the scheme, both from occupiers already based in Leeds and the surrounding area, and from inward investors looking to establish a new West Yorkshire operation. “It’s fantastic to have achieved practical completion on target, with the units presenting very well, and to be able to offer immediate occupation to companies.”

Second phase of Wakefield employment park complete

Tess Egginton
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Second phase of Wakefield employment park complete
Balme Business Park, the second phase of the Flanshaw Way development in Wakefield, has been completed. The business park, which has been masterminded by West Yorkshire multi-let developer, Frank Marshall Estates of Bradford, comprises 26,000 sq ft of brand-new units ranging in size from 1,500 sq ft to 6,000 sq ft. Five of the nine units have already been let in a flurry of deals. The lettings are: Units 1 and 2 to the Clearway Group; Unit 3 to Industrial Electronic Repairs; Unit 8 to Safe Strip UK; and Unit 9 to Arentis Ltd. Edward Marshall, director of Frank Marshall Estates, said: “We are extremely proud of the magnificent success of the two phases of our speculative development at Flanshaw Way. “The four units remaining at Balme range from 2,600 sq ft to 6,000 sq ft. One is currently under offer, and there is encouraging interest in the other three, so would-be occupiers need to act swiftly to snap them up.” Frank Marshall Estates bought the four-acre site, on the outskirts of Wakefield by Junction 40 of the M1, from Flanshaw Property Ltd for £1.3 million in 2020. The first phase of the development featured 17 units, including seven hybrid Nano units and 10 light industrial and warehouse units ranging up to 9,500 sq ft, and was fully let within a year. Edward Marshall explained: “When we bought this land, we promised to create the best business park that Wakefield has ever had. We have now delivered on that promise, despite the lingering challenges posed by the global pandemic and the uncertainty surrounding Yorkshire’s commercial property market. “It is clear that there is a massive pent-up demand in West Yorkshire for high-quality buildings of 10,000 sq ft and under in great locations. We are pleased to be the leading developer in the region for this specific market. “We favour quality local businesses as tenants, as we enjoy dealing with people who love their business as much as we love ours. Our great relationships with all the occupiers of Flanshaw Way proves this point. “Wakefield is a logistics and distribution hotspot, thanks to its superb position at the centre of Yorkshire’s excellent motorway network. The park, now it is fully developed out, will create and maintain 200 new and sustainable jobs, providing a substantial boost to the area’s economy. “This is a development of which Wakefield is justifiably proud. The city is a well-established commercial centre with a large, skilled labour force. The majority of occupiers are quality local businesses who needed properties to match their expanding businesses. But we are also bringing companies from other areas into Wakefield.” Max Vause of Leeds-based property consultants Carter Towler, who are advising Frank Marshall Estates, said: “The recent letting completions prior to practical completion proves the success of the brand-new Balme Business Park. “As always it has been a pleasure working with Frank Marshall Estates to bring this outstanding development to market. The success we’ve had so far brilliantly demonstrates the quality of the park. The state-of-the-art units offer a base for both local and national businesses and I am confident that the park will be 100 per cent occupied very soon. “It’s been tremendous to work with a developer as passionate and professional as Edward Marshall and I’m very proud of what we have achieved together. It has also been great to work with Edward’s solicitor Simon Mydlowski of Clarion.” Avison Young, represented by Rob Oliver, are the other joint marketing agents for Balme Business Park, together with Jonathan O’Connor of Ryden.

Property consultancy acquires auctioneer

Tess Egginton
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Property consultancy acquires auctioneer

Leeds-headquartered property consultancy, Eddisons, has become one of the country’s largest property auction houses by volume after acquiring SDL Property Auctions in a deal worth up to £3.25m. The acquisition will increase the number of auction lots offered annually by Eddisons to over 3,000.

Led by Managing Director Andrew Parker, Nottingham-based SDL Property Auctions sells residential and commercial properties across the UK, offering around 2,000 lots for sale annually. Employing 46 people, the firm is particularly active in the South East, Midlands and Scotland, complementing Eddisons’ property auction strengths in Yorkshire and the North West.

The acquisition builds on Eddisons’ auction business, which trades under the Pugh and Mark Jenkinson brands, with SDL Property Auctions set to integrate with the Eddisons team post-acquisition.

Eddisons managing partner Anthony Spencer said: “I am very pleased to welcome the SDL Property Auctions team to Eddisons. The acquisition significantly increases the scale of our auction business and I look forward to working with Andy and the team in the future.”

He added: “This is the fourth acquisition of the year for Eddisons and we continue to seek further opportunities for expansion across the UK.”

Andrew Parker, SDL Property Auctions Managing Director, said: “Through our team of talented people who place our clients’ interests at the forefront of everything we do, SDL Property Auctions has developed an award-winning reputation for selling property by auction.

“We are excited to be joining Eddisons and I look forward to working with like-minded individuals to develop the opportunities that the deal presents.”

2024 Business Predictions: Shakeel Adli, CEO, Zunikh

Tess Egginton
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2024 Business Predictions: Shakeel Adli, CEO, Zunikh
It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.  It has become something of a tradition, given that we’ve been doing this now for over 30 years. Here we speak to Shakeel Adli, CEO at Zunikh.

Zunikh currently has an office in Sheffield and as such is constantly monitoring the market in Yorkshire (and nationally given we operate nationwide). That said, we believe it is important to look at local market predictions in the context of the national (and even international) landscape. This is because it is often the case that micro market conditions are driven by global events.

Noting that 2023 has been a particularly unusual year following on from Covid and with the continuing war in Ukraine, we expect that 2024 will see markets begin to settle. We can already see inflation beginning to ease and with this we expect that interest rates will slowly come down. Within the property market we anticipate that this will ultimately result in private sales picking up as consumers recover from higher costs of living and the cost of borrowing comes down. This will be aided by likely reductions in the costs of building and building materials, again attributable to the easing of inflation which may bring the price of stock down in the short term. Markets like Sheffield and South Yorkshire should benefit from this and housing prices may start to increase fractionally as demand for stock grows.

We also anticipate that build-to-rent schemes will continue to be popular amongst institutional investors in places like Sheffield and in the region generally given the strength of the rental market, however yields may start to drop as more consumers return to the private sales.

Our outlook for 2024 is generally positive and we expect Sheffield and the surrounding region to reap the rewards of this in due course.

NHS hopes to have diagnostic centre in Hull, with Vinci Building creating it

Stuart Pearcey
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NHS hopes to have diagnostic centre in Hull, with Vinci Building creating it
NHS patients could soon be able to access a wide range of healthcare in the centre of Hull if a proposed £18m Community Diagnostic Centre, earmarked for Albion Square, is approved by Cabinet on Monday 18 December. The NHS has secured £16m in funding from the Department of Health and Social Care to develop a CDC in Hull, £12m of which will go towards construction of the facility, with the remaining amount allocated for clinical equipment such as MRI scanners and x-ray machines. If proposals are approved by Cabinet, the council will contribute £2m of funding from the existing Albion Square capital budget to support construction costs. The work should be done by by VINCI Building, the council’s development partner for Albion Square, whilst architects for the project would be FaulknerBrowns Architects. A planning application will be submitted in support of the plans, with Hull City Council and the NHS currently collaborating and progressing designs. Should Cabinet approval be given, it is hoped that construction will begin on site in 2024, with the facility to open in 2025. The CDC would be accessible for patients, with bus services directly serving the location and the Paragon Interchange just a short walk away, meaning the CDC could accommodate patients from outside of Hull and the East Riding. Cllr Linda Chambers, the council’s portfolio holder for public health, said: “This is an exciting project and one that would bring health, economy and practical benefits. Residents often tell us that they want to see a health service that is easily accessible to them. “Albion Square is a significant development in the city centre and its pleasing to know that such plans are being put in place to accommodate this.” Erica Daley, NHS Humber and North Yorkshire Integrated Care Board Place Director for Hull, said: “NHS Humber and North Yorkshire ICB is delighted to be working with Hull City Council, Hull University Teaching Hospitals NHS Trust and other partners on this exciting project in the heart of Hull city centre. “Subject to the necessary planning approvals, the Albion Square Community Diagnostic Centre will mark a revolution in the way patients from Hull and East Riding will be able to access tests, checks and scans and will speed up the detection of many serious illnesses, meaning patients can start treatment and recovery sooner. “The aim of the CDC is to identify any health problems early and improve outcomes for patients with conditions including cancer, stroke, heart disease and respiratory conditions, as well as reduce waiting times and pressures on acute hospital sites.” “Together with other Community Diagnostic Schemes across Humber and North Yorkshire, this represents an £80 million capital investment and – once fully up and running – will mean there’s extra capacity for around 900,000 additional diagnostic procedures a year.”

HMRC cracks down on till fraud at restaurants and takeaways

Stuart Pearcey
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HMRC cracks down on till fraud at restaurants and takeaways
Takeaways and restaurants across the country have been subject to unannounced visits as part of a crackdown on electronic till fraud after the launch of criminal investigations by HMRC’s Fraud Investigation Service.
A small minority of takeaways and restaurants in the UK are using Electronic Sales Suppression tools, involving software or devices that alter electronic point-of-sale records, thus underreporting a business’s sales and consequently evading tax.
Those involved are being urged to contact HMRC now before their wrongdoing is detected. The longer a business delays in disclosing information, the higher the financial penalties will likely be. Since May 2023 the department has received more than 50 voluntary disclosures from businesses about their undeclared sales.
Marc Gill, HMRC’s Director of Individuals & Small Business Compliance, said: “ESS tools give businesses the appearance of trading legitimately, but in reality they are stealing tax that should be helping fund our vital public services.
“We have sophisticated ways of detecting this type of fraud and anyone using, supplying, making or promoting ESS can face fines of up to £50,000 or criminal prosecution.
“We urge those involved to come forward and use our disclosure facility on gov.uk rather than wait for us to contact you – it could lead to a reduction in financial penalties.”
ESS tools are usually hardware or cloud-based software that allow businesses to understate their income in various ways. Sales are put through the till as normal, but the system allows records to be manipulated – sometimes by deleting sales and linking to either domestic or offshore payment platforms.nline food ordering platforms, to check against what has been declared.
As well as a voluntary disclosure form, HMRC also encourages anyone with information regarding ESS or any form of tax fraud to contact them online.  
 

Forgemasters clears audit hurdle ahead of expansion in nuclear industry

Stuart Pearcey
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Forgemasters clears audit hurdle ahead of expansion in nuclear industry
Sheffield Forgemasters is poised to expand into nuclear fabrication after passing a highly-testing audit to regain coveted ASME status as a key supplier of heavy forgings and castings to the civil nuclear power market. The company is on track to receive its nuclear qualification after an audit by the American Society of Mechanical Engineers recommended it for Material Organisation and welding  accreditations. ASME NPT (Nuclear Partials) is an advanced accreditation, enabling the business to become the only UK producer of heavy forgings and castings able to physically weld-fabricate such safety critical components for the heart of a nuclear power plant. Ian Nicholls, group technical director, said: “The accreditation is a huge development with enhanced requirements and disciplines embracing all our processes, employees and selected sub-suppliers.” Sheffield Forgemasters will be able to supply castings and forgings for civil nuclear applications, and will be able to carry out weld construction activities on these materials through ASME NPT Certification. The ASME CNC committee will need to approve the audit’s findings before the certificate is granted. Ian added: “ASME accreditation opens up significant possibilities for the UK’s nuclear new-build programme and taps into a growing need for nuclear power to solve the world’s energy crisis.” “The ASME code is the most comprehensive series of guidelines for civil nuclear manufacture in the world with an emphasis on doctrines that resonate with the European Nuclear manufacturing code, RCC-M, and other submarine nuclear standards. “Code compliance is a significant undertaking for any company wishing to enter the UK civil nuclear supply chain, requiring comprehensive understanding to avoid code violation. Businesses will need to understand how to engage with this process, and currently, very few UK companies do.” Sheffield Forgemasters first gained ASME accreditation as a Nuclear Materials Organisation in 1992, and will now continue its work to develop manufacturing technologies for the next generation of SMR civil nuclear power plants.

East Riding and Hull urged not to fall behind in embracing devolution

Stuart Pearcey
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East Riding and Hull urged not to fall behind in embracing devolution
East Yorkshire and Hull have been urged not to “fall behind” regions that have already embraced devolution. The call comes from Tees Valley Mayor Ben Houchen, who has told East Riding councillors about how the East Riding and Hull could make a success of devolution, based on his experiences leading the Tees Valley Combined Authority. East Riding of Yorkshire Council and Hull City Council have agreed a proposed deal with the Government that would lead to the creation of a Hull and East Yorkshire Mayoral Combined Authority, led by a directly elected mayor, who could be in post by spring/summer 2025. It will be put to East Riding councillors on December 21st. The MCA would have devolved powers to invest in areas such as transport, skills and housing, as well an additional £400m of devolved funding over the next 30 years to drive growth and deliver local priorities. Mr Houchen said it was a “travesty” that one of the UK’s “most successful and important regions” was currently “not at the table” when it comes to securing large investment. He said the absence of a devolved combined authority had led to missed opportunities in the East Riding and Hull, with businesses to choosing to invest in devolved areas such as Teesside over the Humber region. “The longer areas like Teesside and the North West continue to steal a march, the longer areas like the East Riding and Hull will fall behind,” he said. Mr Houchen pointed to Humber Freeport as an example of a huge opportunity for the region, but stressed the importance of having a mayor if the region is to take full advantage of it. “It’s absolutely vital you get it right,” he said, “but you will never succeed to the extent that you should until you get a devolved mayor who can really supercharge all the technical policy bits.” Speaking from experience, Mr Houchen said elected mayors could “really bang on doors in Whitehall”, where they “have a standing that is completely different to any sort of backbench MP or local councillor”. On the extra investment that devolution can bring, he emphasised that, while the initial devolution deal is important, it is just the start of a journey, as devolution would open up new funding streams, powers, and opportunities that are currently not available to the region. The Tees Valley Combined Authority has so far secured more than £1.6 billion on top of the funding agreed as part of Tees Valley’s original devolution deal in 2017, bringing the total to more than £2 billion, said Mr Houchen. “People get fixated on how much money we getting out of government on day one,” he said. “Is it going to be £400 million, £500 million, £550 million? You know, it’s all great, right? And I’m sure you’re all going to push to get as much money for your local area as you can, and rightly so. “But don’t let it get in the way of the deal, because once you have a mayoral deal, once you have a combined authority, there are funding streams, there are powers, there are opportunities that open up to you that just aren’t available today. “And so I think you will be sat here in five or six years’ time, as we are, saying, actually, whatever financial deal we agreed in 2023-2024, that’s grown to many, many hundreds, if not billions of pounds more than you started out with.”

Company boss invests £1.5m in a new workspace, believing in an end to ‘work from home’

Stuart Pearcey
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Company boss invests £1.5m in a new workspace, believing in an end to ‘work from home’
Wayne Spriggs, Founder and CEO of Lusso, believes working from home as a not productive option for his business, and has invested over £1.5 million to have Leeds-based Building Interiors provide a workplace for his team. His sentiment is reflected in the most recent KPMG CEO Outlook Survey which revealed two thirds of bosses believe workers will return to the office, five days a week, in the next three years. The survey reports 87% of global leaders believe that reward could be linked to incentivising a return to the office with many saying that bringing teams together increases creativity and collaboration as well as fostering a corporate culture. After committing to buy a new 12,000 sq ft headquarters building in Teesside during lockdown, Lusso worked alongside office design and fitout specialist, Building Interiors to create a space more akin to a luxury apartment to achieve 100% workplace engagement from the team. Mr Spriggs said: “Lockdown was a necessity, but it has created a mindset that working from home is productive and better for individual wellbeing.  I don’t believe that – delivering a luxury product requires outstanding service and it is critical that our customer service team can physically interact with our salesforce, on the ‘shop floor’ every day.  We saw a dramatic impact during lockdown, not just in customer service delivery but also in our team engagement and their sense of reward. “We decided to buy Lusso House because it was highly accessible, just off the A66, with plenty of room for expansion. We enlisted the expert help of Building Interiors to deliver an exceptional place that our team wanted to work in and from which we could attract strong talent moving forward.” Building Interiors totally redesigned the typically bland 12,000 sq ft office building, transforming three floors into modern and agile workspaces that reflected the high-end nature of the Lusso brand but also provide a fun and motivating environment to work in. It delivered the full turnkey solution including, space design and planning, M&E installation, bespoke joinery and specification of finishes and furniture. The design supports health and wellbeing with the entire ground floor dedicated to recreation with a 24-hour access gym, pool table, arcade games, bar and social spaces. Unique design elements include feature walls, zoned carpeting, feature lighting and areas dedicated to neurodiverse needs. Jeremy Poole, Sales Director at Building Interiors, said: “Our brief was to create an engaging workplace where 100% of the team wanted to be. Quite a tall order given that home working has become so popular. The entire team could easily occupy half of one floor in Lusso House, but Wayne was insistent on providing a plenty of breakout spaces for relaxation, fun and engagement. “We continue to work with Lusso, updating spaces as the business evolves, and we value this project as a flagship for how 100% return to work can be achieved successfully.” The investment for Lusso has already paid dividends since the team has expanded three-fold in the last two years and the business continues to grow at a rapid pace with Middle East expansion next on the horizon. Wayne added: “A business like ours depends on dynamic and motivated teamwork but how can you create that with a fragmented, disengaged team? Whilst I appreciate the prospect of losing strong talent opportunities, the impact of working from home has proved far more negative on the business as a whole.  We are immensely proud that every one of our team has embraced the new office with huge enthusiasm.” Lusso offers single branded collections of luxury furniture, homewares, fixtures, and fittings for residential and commercial settings. Established in 2014 it has grown exponentially to become a £50m turnover business and features in the Sunday Times Fast Track 100.    
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