Gatwick Diamond Initiative Business Barometer Survey Findings Spring 2013 Background: This Business Barometer research study is commissioned by The Gatwick Diamond Initiative (GDI) to help monitor local economic conditions on a regular basis. Conducted by Prowse & Company Ltd, this online survey is designed to source primary data from local businesses to measure how the Gatwick Diamond is performing as a location for business. The survey provides quantitative and qualitative evidence of business trends to aid the three Gatwick Diamond Task Groups in their activities. Importantly, the survey offers a snapshot of business confidence in the Gatwick Diamond area. In addition to general business questions, each survey also considers a particular theme. This quarter focuses on Airport Expansion. A total of 57 responses were received during the months of February and March 2013.
Profile of Respondents Which industry sector are you in? 4 35% 25% 15% 5%
Number of employees Company Turnover per annum Profile of Respondents 51 million + 10.1 to 50 million 5.1 to 10 million 1.1 to 5 million 501k - 1 million 251k - 500k 250k or less What is your company's estimated turnover per annum? 3.8% 1.9% 7.5% 9.4% 9.4% 30.2% 37.7% 5% 15% 25% 35% 4 % of respondents How many people does your company employ? 250+ 101-250 51-100 21-50 11-20 2-10 1 3.6% 5.5% 12.7% 12.7% 16.4% 21.8% 27.3% 5% 15% 25% % of respondents
General Business Confidence Is your business turnover likely to expand, contract or remain the same in the next six months? Do you anticipate the need to further consolidate and reduce business costs within the next six months? 26.3% 14. 8.8% 64.9% 42.1% 43.9% Expand Contract Remain the Same Yes No Unsure Are your staffing levels likely to expand, contract or remain the same in the next six months? 49.1% 40.4% 10.5% Expand Contract Remain the Same
% of respondents % of respondents Importance of Gatwick Airport Did you locate your business in this area due to the proximity of Gatwick Airport? 8 7 6 5 4 14. 70.2% 15.8% Yes No Other 6 How important is being located near Gatwick Airport for your business? 5 4 49.1% 21.1% 29.8% Very important Somewhat important Not important
Importance of Gatwick Airport Which of the following statements applies to your business? None of these statements 37.5% My business uses the airport to reach international customers. 39.3% My business uses the airport to reach customers in London and the UK 28.6% I do business indirectly with the airport (e.g. through the supply chain) 32.1% I do business directly with the airport 17.9% 4 5 % of respondents
% of respondents % of respondents Airport Expansion Do you agree that airport capacity should be increased at Gatwick with the view to it becoming an aviation hub? 7 If expansion were to take place at Gatwick, would this be beneficial to your business? 6 6 5 4 5 4 Yes No Don't know Yes No Don't know If you do not want Gatwick to expand, where would you prefer for airport capacity to be increased instead? No expansion at any other airport Other airport outside South East 15.4% 15.4% Thames Estuary 38.5% RAF Northolt 23.1% Stansted 38.5% Heathrow 0. 5% 15% 25% 35% 4 45% % of respondents who do not wish to see Gatwick expanded
Airport Expansion Please state why expansion of Gatwick would be beneficial to your business Increase number of businesses looking for assistance. There is a possibility that expansion could be beneficial if increased in-bound visitors were to visit Surrey and Sussex and my client base needed additional advice on maximising opportunities. Extra local business due to construction and increased employment. At the moment, we use BA as our principle carrier. BA has moved many of its flights to T5. If BA ran more flights from Gatwick it would be good. There would be a potential requirement for our products and solutions. More skills and affluence to area. increased training. I'm not sure that it would be directly beneficial to my business, although, logically if there are more companies involved in supplying/running the facility there is potentially more demand for my business services. Increased business in area. We are a corporate chauffeur service servicing London, London airports and Home Counties and so the more traffic to and from Gatwick, the more opportunity we have to do business. Because of the increase in business generally. Growth in inbound/outbound business and leisure tourism. Exports to emerging economies and wealth generation that it will bring to the Gatwick Diamond/UK PLC. Businesses deciding to relocate to the Gatwick/Gatwick Diamond area. Businesses deciding to remain in the Gatwick/Gatwick Diamond area. Key sector growth. Supply chain growth. Skilled/Semi-skilled employment growth. Improved freight handling facilities would reduce lead times for product sourcing. It may provide improved destinations to reduce travel to LHR. Routes to international clients and potentially more inward investment. More companies would move to Crawley and surrounding areas providing opportunities for me to supply services to these companies. Continued...
Airport Expansion Benefits of expansion continued... Increased corporate travel and tourism requiring accommodation or meeting facilities. More opportunity to be closer to our international partners. Potential new businesses. I work with small and starter businesses and feel these would benefit from the increased supply chain opportunities and the improvements to the local economy generally. If the reverse happened through expansion elsewhere then these could be adversely affected as there is a risk of a subsequent downturn in the local economy. The increase in ancillary services expands my prospective client base. Potential to be involved in management of construction projects. There would be economic growth. Expansion likely to result in drive for premises & jobs and as we are agents for commercial property owners that would benefit us. More employment opportunities for people who are tenants of our properties. Increased runway capacity would allow more flights to take off and land at times convenient for business. Better international connectivity for me. Would produce more economic growth in the Gatwick Diamond - more people to do business with. The expansion would bring more people to the area. The local economic and income benefits of growth in activity, business and housing development are strategically linked to the functioning capabilities of the public sector in their delivery of services. Delivery of improved transport and communication infrastructure in a managed way is a strategic priority. Increase employment opportunities for local people, increase businesses basing their companies in the Gatwick Diamond, encourage our local home-grown talent to remain in the Diamond rather than commute elsewhere. Gatwick is a major hub for both the company and customers to transit, with the added benefit of both EU and some international flights. Expanding the airport makes international business more attractive. We supply products to Gatwick engineering supplies. More small businesses and people will use the Gatwick Diamond Area as their base. Our customers are primarily large businesses. We would have more customers within easy reach. Easier access for customer visits and presentations.
Airport Expansion Please state why it would not be beneficial to your business if Gatwick expanded I live in Gatwick area and increased aircraft noise would be a negative. We operate in the UK market only. Our company is based in the area to serve London; we also have access to major roads and rail as our Company works nationwide. May take skills from our business; increased pressure on local services i.e. Health, Roads etc. There is no direct link between the expansion of Gatwick and the prosperity of my customers. We use the airport occasionally and even at the height of activity once a month. It is unlikely the international routes we use would ever come to Gatwick. Expansion would probably increase airport fees which would be detrimental to our airport use. Cost is an important factor in our planning. More competition for staff could drive costs up. Increased road traffic would lead to more congestion and increased travel times. My business relies on local trade rather than international. We do not receive much international business. Most clients are UK-based. International clients communicate with us online. As a Local Authority, we do not rely on the airport, but are concerned about its environmental impacts on the surrounding area. Increased traffic congestion around and on major routes to and from the airport, Growth without planned investment in wider infrastructure; congestion and/or growth occurring without retaining local benefit (skills and patronage of local services used by West Sussex communities). I can't see any way this would be so. There is not enough labour in the area to allow Gatwick to expand and other businesses in the area would lose people as happened when the North Terminal was built and opened.
% of respondents Airport Expansion 9 8 7 6 5 4 If another airport was selected as the UK's Hub Airport, rather than Gatwick, would this have any impact on your decision to remain in the Gatwick area? 8.9% 82.1% 8.9% Yes No Don't know If you answered YES, please explain how your decision to stay in the Gatwick area might be affected if another airport was chosen as the UK's hub airport. Businesses and inbound/outbound tourists would 'migrate' from Gatwick and the Gatwick Diamond region to where accessibility to markets and connections are easiest thereby directly affecting our trading and growth prospects. It is likely we might be compulsory purchased and receive compensation that may lead us to relocate our operations to Ireland. Businesses would move to other areas and towards the new Airport. If Gatwick were to close or decline then it would be a significantly less attractive location. While moving would be painful and costly, it might become essential. The area would shrink from a business perspective therefore potential customers would be less.
% of respondents % of respondents 8 7 6 5 4 6 Business Finance In the past three months, have you sought external finance to sustain and/or grow your business? 24.1% Yes 75.9% How do you rate the availability of financing options? No 5 4 Excellent Good Poor
Getting more clients. Gaining new contracts in an ultra competitive environment. We are finding large companies prepared to undertake contracts they would not have even considered a few years ago; Squeeze on public sector finances. Broadband service and parking. Finding highly qualified technical resources (e.g. Software Engineers). Maintaining and increasing our market share in an increasing competitive market. South East being over populated and getting to and from company base to work sites and the time it takes. The new welfare reforms on housing. Business and customer confidence, combined with Government assisting economic growth. Maintaining and growing our customer base. Acquisition of new clients and retention of existing ones. An expanding economy (meaning unclear). Access to growth finance. Changes in Licensing through our local council meaning we now have a minimum of something approaching 6 months from date of offer of employment to new staff to actual start date (...); this has a devastating effect on our ability to supply new accounts as we cannot react with anything like the speed with which we should. Limited runway capacity and route networks at Gatwick airport. Finishing the final stages developing our projects; seeking international co-production and sales. Recruitment of temporary high calibre contract staff to meet near term opportunities. Availability of cash to grow. Pressure on margins. Growing the business, by marketing and networking. Decline in custom due to recession and drop in value of our services due to technology and changing priorities. Finding cheap premises, finance to expand and also good hard working reliable staff. Growth. Overheads. Helping clients getting paid promptly by big business. This is my first year of trading so winning new business. Cashflow. Continued... What is the most pressing business concern for you currently? Business Concerns
Business Concerns Business concerns continued... Recruitment and retention of qualified staff. Starting up! Uncertainty of economy. Cost of premises. Utility costs. This current government has no strategy to promote growth, and do not seem to understand that cutting everything so hard and fast is contributing to stagnation of the economy. Dealing with the impact of government welfare reforms; securing future finance for further investment in social housing. Increasing new business sales with new and existing customers. Cashflow - payment terms of some customers disadvantage SMEs. Skills - finding the right skills in potential employees - helps them hit the ground running, and saves on training. The lack of meaningful development in East Grinstead. Distinct local authority areas not seeming to recognise that they are part of the Gatwick Diamond and, if they do, not seeming to want to collaborate for the greater economic development good. Residential population do not recognise that they live in the Diamond. Getting the message out there that the Gatwick Diamond is bigger than Gatwick Airport. We need to engage more employers in working with education and training providers and DWP/Jobcentre Plus to recruit on-board local staff into their businesses. We need to skill the workforce for the jobs that are available. Growth. Getting our message to new/potential customers. To meet out target this year which is to approximately double turnover. Uncertainty in the market place. Growth capital access. The recession. We need our customers to have the confidence to commit longer term than is currently the case. Getting paid on time. Lack of investment confidence and uncertainty.
Conclusions Finally, please advise if there is anything that you would like the Gatwick Diamond Initiative to focus upon in the year ahead: Transport 24.4% Skills / Training 33.3% Premises/Development Sites 24.4% Local Procurement Inward investment 31.1% 33.3% Infrastructure Investment 37.8% Influencing national/regional policy 28.9% Housing 17.8% Access to finance Business support 26.7% 28.9% 5% 15% 25% 35% 4 % of respondents Other suggested areas for the Gatwick Diamond to focus on: Giving a clear message of how it fits within the multi layers of LEP's and Surrey Connects. Many graduates do not want to live in Crawley. Building relationships with local businesses and organisations. Improvement to motorway transport is needed; alternative connections to M4 outside the M25, and a south coast motorway to Southampton so we can develop our business interests in Brighton. Encouraging prompt payment. Helping Gatwick promote expansion. I think promoting the concept of the Gatwick Diamond is a sound one. Anything which encourages local cooperation between businesses is a very good idea.