By Mark Adams, Partner and Head of the Corporate Team at Hay & Kilner
For a substantial proportion of North East business owners, things might seem pretty tough at the moment.
A number of well documented factors that are well beyond our control, from spiralling energy, material and labour costs, through to the after-effects of Covid and increasing interest rates, have combined over recent years to make staying in business, let alone securing growth, extremely challenging for many national and regional business owners.
Virtually no sector seems to be immune to the current economic climate, margins are being squeezed, corporate insolvencies are on the rise and, according to some, there’s no real sign that things are going to get significantly better soon.
But, while this is all undoubtedly and painfully true for many, there are still lots of things happening within the regional economy which are giving cause for optimism, especially when they’re allied to the North East’s enduring resilience, robustness and ‘can do’ attitude.
From our own point of view, we still have a lot of good quality active transactions which we’re currently working on, and several others in the pipeline, and whilst rising interest rates have increased the cost of borrowing for many, we’re not experiencing a slowdown in the deals market as yet.
We’ve completed a number of significant employee buy-outs in the region, with management teams putting faith in themselves to carry on the work of those business owners who are looking to retire or do something different.
There are also lots of interesting things happening in the North East technology sector, with Newcastle in particular becoming a recognised UK “hotspot” that’s attracting highprofile tech businesses to the region, including Italian defence specialist Leonardo, Japanese digital consultancy Monstarlab and US cyber security firm Arctic Wolf.
I do think the years of people talking about the growing technology sector in the North East have now crystallised into something tangible and that the region is now reaping the rewards in terms of investment and jobs.
The recently launched FinPact initiative is also looking to invest in our region’s financial services technology sector, and we’ll no doubt all be watching with great interest to see how this evolves throughout the rest of the year and beyond.
There’s clearly no magic bullet for curing some of our macro-economic troubles, but while we all work towards putting things right, the words of one particular client I recently spoke with spring to mind, who said “in the words of Albert Einstein, Mark…remember, in the middle of every difficulty lies opportunity – it’s up to us to find it and seize it!”
And it’s this which I think could well be the best motto by which the North East business community operates.
For further information and advice on any aspect of corporate or commercial law, please contact Mark Adams at Hay & Kilner on 0191 232 8345 or mark.adams@hay-kilner.co.uk