A happy and prosperous new year to all and a positive and busy start it has been

Looking back on 2017, we saw continued buoyancy from businesses in the Midlands, and a better performance than expected from the UK economy as a whole. What do we see on the horizon for 2018?

Heading into 2017, expectations for the year were gloomy. The economy has indeed slowed down from the positive pace at which it ended the previous year, but the eventual outcome looks to have been better than most expected.

Better than expected performance in 2017 has proved enough for the Bank of England to reverse their emergency base rate cut that followed the EU referendum.

Carillion’s troubles will send a tremor through the construction industry and is likely to have a detrimental impact on the wider supply chain, with many companies considering how much they are owed, whether they will be able to make any recovery and what impact non-recovery will have on their own trading situation.

When an event such as Carillion happens it emphasises the need to have tight control of cash flow and minimise the damage to your business. With the government seemingly refusing to bail Carillion out, it shows that no matter how large the company and the brand, whether it supports government projects or not, protection of your cash flow remains solely your responsibility.

The government has announced various strategies for increasing the supply of houses with the following measures

  •  £44 billion of public funds to support house building with the aim of delivering upwards of 300,000 new homes a year by 2025
  • allow local authorities to levy 100 per cent council tax on empty properties
  • permit the compulsory purchase of land which is being banked for financial reasons rather than being developed for housing

Changes central government housing policy which, thanks to the reforming zeal of Mrs May and Secretary Sajid Javid have launched national housing agency Homes England, the successor to the Homes and Communities Agency. Sajid said Homes England will bring together the body’s existing planning expertise and its new land-buying powers to play a “major role” in securing land in areas where people want to live, support SME builders into the market and resource brownfield sites.

Saijid says “This government is determined to build the homes our country needs and help more people get on the housing ladder. Homes England will be at the heart of leading this effort”

We expect this level of growth to be maintained as the UK leaves the EU in 2019. The recent agreement reached on the UK’s “divorce deal” with the EU provided an optimistic end to 2017. As talks progress on the transition period to smooth the way to post-Brexit relations, a cliff-edge moment for the economy has likely been avoided, for the foreseeable future at least. This should partially lift the clouds of uncertainty hanging over the UK economy, potentially a boost to business confidence, lessening the risk of a significant slowdown in investment in the months ahead.

In light of this backdrop, the general mood among the businesses in Worcestershire and The Black Country is one of optimism. There is confidence in the regional economy, with Birmingham the most rapidly-improving city in the UK.  With the announcement of Birmingham hosting the Commonwealth Games, HS2 and the Midland Metro extensions underway into the heart pf the Black Country will have positive knock on effects on business and development in our area with better connectivity to the rest of the region and the wider UK.

Companies need to play a role by ensuring greater focus is placed on upskilling their workforces through quality training. However, a strong approach from the Government which encompasses targeted investment at a regional level is necessary to increase productivity across the UK.

Our clients are hopeful for blue skies on the horizon in 2018. Political uncertainty will no doubt continue to be a prominent feature of discussion. However, in our view, the regional economic outlook will not be as bleak as some would have predicted this time a year ago.

Commercial property activity is brisk with a number of properties to be sold going to “best bids” and a healthy level of enquiries with some good new instructions in the pipeline. So if there ever was a time to consider the future of the property assets it is now – take some professional advice.

So hopefully not a New Year “blip” but a start to a positive 2018.

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