Member Article

Yorkshire family businesses will contribute £48 billion to the UK economy

According to a new report by Barclays, Yorkshire family businesses will contribute over £47.96 billion to the UK economy by 2018.

Barclays Business Banking supports over 130,000 family SMEs across the UK1 – 22% of which are in Yorkshire

First generation family SMEs currently contribute £180 billion a year to the UK economy - this will increase by £38 billion by 2018, says Barclays Business report so that the UK’s family businesses will contribute £218 billion.

The number of family owned businesses has risen to 2.42 million, according to the report, the highest level since the onset of the 2008 recession.

First generation family-owned SMEs are set to see their revenues rise from £540 billion a year to £661 billion by 2018 – a 22% increase (£121 billion).

This is according to a new report2 by Barclays Business, a leader in lending to small and medium sized enterprises (SMEs).

The report found first-generation family SMEs3 currently contribute £180 billion in gross value added (GVA)4 to the UK economy, an annual contribution that is set to rise by 21% in nominal terms, reaching £218 billion in 2018.

The value of family SMEs, taken as a group, to the British economy (£180 billion) is currently greater than that of the overall manufacturing and wholesale or retail sectors – demonstrating how vital these businesses are to the country as a whole. As many as almost one in five (20%) Barclays Business customers are family SMEs.

Caroline Pullich, head of Barclays Business in Yorkshire commented: “Family SMEs play a powerful role in the UK economy and one that is set to increase if they have the right access to support and funding.

“Whether they aspire to become a household name like J Sainsbury or Arcadia or simply to provide a strong income for their own family, they offer the country value through both their economic contribution as well as their employment opportunities.”

The rise in the number of family firms – and increased investment from existing family owned businesses will see greater investment in the future growth of the family business sector.

Barclays Business Banking expects family SMEs to draw down up to £3 billion over the next three years.

The “Family Affair: Spotlight on UK Family SMEs” report, conducted by Barclays Business and CEBR, found that there are currently 2.42 million first generation family SMEs in the UK, the highest number since the recession took hold in 2008, when the figure stood at 2.45 million.

The number of family SMEs has increased over the past three years, up from 2.32 million in 2011. That number will rise further – to 2.65 million by 2018.

First-generation family SMEs make a sizeable contribution to UK employment – and this contribution is also set to rise in the coming years.

There are currently 5.5 million jobs provided by these family SMEs in the UK- equivalent to the number of jobs in the public sector5. By 2018 this will increase by 9% to 6 million.

In Wales and the South West family SMEs are one in four of customers, while they are one-half of Agriculture firms and one-third of the Real Estate sector.

Caroline Pullich added: “One in five of our business customers are family SMEs and we have seen a real increase over the last twelve months in the number of family businesses coming to us for support, especially in Yorkshire, mainly to help expand and achieve growth.

These have been in varying sectors and sizes, from manufacturers and hotels, to restaurants and many of these family businesses are seeking to take advantage of the Grand Depart in July.

“We believe the end of the recession is paving the way for dynamic family firms who want to run businesses they are passionate about, and we want to help them achieve those ambitions.”

This was posted in Bdaily's Members' News section by Clare Burnett .