LIVERPOOL BUSINESS SURVEY RESEARCH REPORT MARCH Report prepared by Liverpool Vision Survey work undertaken by 2020 Research

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1 LIVERPOOL BUSINESS SURVEY RESEARCH REPORT MARCH 2016 Report prepared by Liverpool Vision Survey work undertaken by 2020 Research

2 CONTENTS Page Section 1: Executive Summary 1.1: Executive Summary 3 1.2: Key Messages Section 2: Analysis At An All Liverpool Level 2.1: Liverpool As A Place To Do Business 5 2.2: Quality Indicators 7 2.3: Prospect for Growth 8 2.: Liverpool Vision 9 2.5: Liverpool City Council : Brand Awareness : International Trade : International Festival for Business Section 3: Analysis At An Area Level 3.1: Liverpool As A Place To Do Business : Quality Indicators : Prospect for Growth 17 Section : Analysis At A Sector Level.1: Liverpool As A Place To Do Business 18.2: Quality Indicators 19.3: Prospect for Growth 20 Section 5: Appendices 1: Map of Liverpool 21 2

3 SECTION 1: Executive Summary 1.1 Executive Summary The Liverpool Business Survey (LBS) is undertaken on an annual basis, to measure the opinions of senior decision makers running businesses in Liverpool. The survey provides a quantified rating of how they feel about Liverpool as a place to do business, and explores the key factors which are driving their opinions. The survey tracks the attitudes of businesses on a number of key quality indicators, including cleanliness, safety, transport, quality and cost of premises, quality of workforce, local authority services and business support. The LBS reviews what expectations companies have about their short term and longer-term growth prospects, and the actions and initiatives they will be taking to help support the growth of their business. This ensures that Liverpool Vision has an understanding of the issues and concerns local businesses have and therefore how activity can be tailored to meet local business needs. The research work for the LBS 2015/16 was undertaken by an independent research agency 2020 Research, with the analysis of the survey results and report writing undertaken by Liverpool Vision. This report provides a summary of the survey findings for the city in total, together with a detailed breakdown by area and sector, with comparisons to previous years. The sample for the survey was provided by Liverpool Vision, as an extract from the MINT database of Bureau Van Dijk Electronic Publishing (BvDEP). The database provides comprehensive coverage of the business population in Liverpool, representing all sizes of company. The research is restricted to active businesses operating in the city on a not for profit basis. Non-trading entities, businesses in the public sector, educational establishments and hospitals, places of worship and charities are therefore excluded from the survey. A total of 500 interviews were undertaken, split between 13 telephone 87 and online interviews. This is a reduction on previous years, where 850 telephone interviews were undertaken, but ensured a robust methodology was maintained that was able to delivery comparative results, whilst also delivering costs savings. All interviews were carried out with the most senior manager at each site. No referrals were made to head offices, since it was important for the survey to maintain a local perspective. The survey was structured to provide a balanced coverage of each of the Neighbourhood Districts City Centre, North and South as well as proportional coverage to ensure a balance of Liverpool s industry sector and in terms of business size. Full details on these splits are included within accompanying Technical Report. 3

4 1.2 - Key Messages Ratings of Liverpool as a place to do business have slightly decreased this year: The proportion who rated Liverpool as or 5 out of 5 to do business decreased from 76% in 201/15 to 73% in 2015/16. However, this is still a significant improvement on 67% of businesses rating the city or 5 in 2013/1. Favourable attitudes are being driven by the perceptions that Liverpool is a friendly and thriving business destination. Factors that saw significant increases this year were support for business and culture. Strong international links saw a mention for the first time this year. Workforce skills remains the most highly rated influence upon perceptions of Liverpool as a good place to do business, with a score of 8.63 out of 10: Workforce skills has consistently been rated as the most important factor since the start of the LBS but cost of premises, business support & training and local authority services have seen the largest improvement in ratings this year. Short term growth prospects (over two years) are slightly less optimistic: 51% of businesses now expect growth over the short term, compared to 58% last year. Where growth is expected this is anticipated to come from personal determination and growth in the local economy (both stand at 21%). Business remain very optimistic over long term growth expectations: 83% of businesses anticipate growth in the local economy over the next five years and 7% anticipate growth in the national economy, meaning that confidence is stronger in the local economy than the national economy. Businesses anticipate taking on staff to help aid future growth: 55% of all businesses are expecting to take on new staff over the next five years. The main areas where businesses envisage that they may need help to realise their growth ambitions are in expanding into new markets within the UK and internationally: 27% of all businesses are looking for support to help them expand into new markets within the UK and 12% overseas. The number of businesses currently exporting remains low but the proportion of businesses planning on doing so has increased: 13% of all businesses currently export, which remains largely unchanged. However, those planning on doing so has increased from 1% in 201/15 to 3% in 2015/16 and 5% anticipate that exporting will help aid long term growth. Awareness of Liverpool Vision s brands has increased: 39% of businesses are aware of the it s Liverpool brand, having risen from 23% in 201/15. Brand adoption has also significantly increased, from 5% last year to 16% this year. Businesses are overwhelmingly more positive about the benefit of hosting the International Festival for Business 2016 on Liverpool: 83% of businesses think IFB2016 will impact positively on Liverpool, although anticipated participation levels currently stand at 21%. With companies largely unclear of the positive impact of participating in the festival on their companies, articulation of the benefits to business within the city region will ensure local benefits are maximised.

5 SECTION 2: ANALYSIS AT AN ALL LIVERPOOL LEVEL Liverpool As A Place To Do Business Liverpool has seen a steady rise in ratings of Liverpool as a place to do business, rising from 59% in 2009/10 scoring or 5 out of 5 to 73% in 2015/16. Ratings have slightly decreased from 201/15 where 76% rated Liverpool as or 5 out of 5, however, perceptions saw a significant rise on 2013/1 ratings (67% to 76%) and results this year are still significantly above historic averages. Only % of businesses rate the city 1 or 2 out of 5. Ratings of Liverpool as a place to do business, with 1 being the lowest and 5 being the highest. 2015/ / / or 2 out of 5 3 out of 5 out of 5 5 out of / / / / /1 201/ /16 1 or 2 out of 5 3 out of 5 out of 5 5 out of 5 5

6 2.1 - Liverpool As A Place To Do Business Those who rated the city as an excellent place to do business were asked the reasons behind giving this high score. The share of mentions is grouped into different categories in the chart below. Whilst levels of businesses saying their high rating is due to a thriving and vibrant city remains high, it is the friendly and good community spirit which has significantly increased this year. Along with the new entrance this year, it s just great, positive perceptions of the city are increasing. With support for business, culture and strong international links all seeing significant increases this year, positive perceptions are due to a wider and more diverse set of drivers. Reasons for rating Liverpool as an excellent place to do business Friendly, good community spirit Thriving and vibrant Good transport links It's just great Suits my business needs Support for local businesses Culture Attracts tourists Strong international links Financial investment in the city Other Low business rates Reputation/brand of the city is good Skilled workforce /16 201/15 6

7 2.2 - Quality Indicators Business perceptions of the city are tracked on a quantitative basis through the measurement of eight key factors, which are rated on a scale from 1 to 10. All of these have seen an improvement since last year. With the largest improvements being for the cost of premises (+0.52), business support & training (+0.53) and local authority services (+0.39). Workforce skills remains the most highly rated factor with an average score of 8.63 out of 10, it has consistently been the highest rated factor. Business support and training is the lowest rated factor with just 6.3. The relationship between overall ratings of these eight factors and their importance to overall ratings of Liverpool as a place to do business can also be determined. Safety in the city and quality of the workforce both have a big influence on overall performance. Local authority services also has a significant influence and with overall ratings of local authority services the third lowest, demonstrates that improvement in local authority services could drive an overall improvement in Liverpool as a place to do business. Quality indicators Safety Transport/ accessibility Quality of premises Business Support & Training LA Services Cleanliness Workforce Skills Cost of premises /16 201/15 Influence of quality indicators Safety in the city Quality and skills of workforce Local authority services Quality of premises Transport & accessibility Cleanliness Business support services Cost of premises

8 2.3 - Prospects for Growth Businesses are slightly less optimistic than last year about growth expectations, with 51% of companies expecting to grow over the next two years, compared with 58% last year. These growth expectations are driven by increased personal determination (21%) and a growth in the local economy (21%). A significant decrease has been seen in those business that expect growth due to a growth in customers, 17% compared to 30% last year and 0% in 2013/1. Reasons for expecting decline are driven by anticipated competition (30%) and recession/no growth (26%). Confidence in the local economy over the long term (5 years) remains strong with 83% of businesses expecting growth. Whilst confidence in their own ability to grow (81%) has increased, confidence in the national economy remains weaker (7%). To help drive future growth 55% of businesses are likely to take on new staff and, a new factor identified this year, 6% businesses are looking to expand into new markets. To aid this long term growth, businesses envisage seeking support for expanding into new markets, with 12% looking for support to expand into new international markets and 27% for support to expand into other UK markets. Expectations of Growth In Next 2 Years (%) 2015/ / Decline 0 Stay the same 60Grow Confidence In Growth Prospects Over Next 5 Years (%) /16 201/ /1 Growth of the business Growth in the UK economy Growth in the Liverpool economy 8

9 2. - Liverpool Vision The fall in awareness of Liverpool Vision, from 76% last year to 7% this year, continues the significant drop in awareness experienced since , when awareness of Liverpool Vision stood at 80%. Whilst awareness of Liverpool Vision is growing in the City Centre, the overall drop in awareness is due to significant drops in both North Liverpool (-%) and South Liverpool (- 5%). Contact levels with Liverpool Vision reflects awareness patterns, with an overall drop (17% in 201/15 to 1% in 2015/16), with much lower levels of contact seen in both South Liverpool (13%) and North Liverpool (8%) compared to the City Centre (22%). Awareness of Liverpool Vision (%) / / Total City Centre North South Contact with Liverpool Vision (%) 0 201/ / Total City Centre North South 9

10 2. - Liverpool Vision Whilst those businesses that were very satisfied with contact from Liverpool Vision has risen from 51% last year to 59% this year, those that were either quite or very satisfied has dropped from 90% to 83%. Those businesses that were not at all satisfied with contact with Liverpool Vision has more than doubled from 3% to 7%. Of those businesses that had contact with Liverpool Vision, 5% had contact with IFB, 31% with Invest Liverpool and 27% with Marketing Liverpool, with a small proportion clearly having contact across the company. Satisfactions with Contact from Liverpool Vision (%) 2015/ / Not at all satisfied Not very satisfied Quite satisfied Very satisfied 10

11 2.5 - Liverpool City Council Contact levels with Liverpool City Council are evenly spread across the city and have roughly maintained those levels seen last year. Satisfaction with the contact with Liverpool City Council has remained high (73%) but those very satisfied has increased significantly, rising from 27% to 0% this year. This is in addition to the significant rises seen from to , where satisfaction levels rose from 72% to 65%, indicating that the City Council is becoming more business friendly. Contact with Liverpool City Council (%) Total City Centre North South 201/ /16 Satisfaction with Contact From Liverpool City Council (%) 2015/ / Not at all satisfied Not very satisfied Quite satisfied Very satisfied 11

12 2.6 - Brand Awareness Where there is comparative data, brand awareness has significantly increased, with awareness of it s Liverpool increasing from 23% to 39%. Increased awareness has translated into brand adoption for it s Liverpool with a huge increase in adoption levels, from 5% in 201/15 to 16% in 2015/16. Awareness levels of Liverpool in London (3%) have remained consistent with last year, however, they still lag considerably below those levels seen in 2013/1 where 52% of businesses were aware of Liverpool in London. Whilst businesses continue to look favourably at the Liverpool in London office, the percentage of businesses that think the initiative can positively impact their business has from 39% to 30%. Liverpool Vision Brand Awareness Brand Adoption It s Liverpool 60% 50% 50% 20% 16% 0% 39% 37% 30% 23% 10% 20% 10% 12% % 5% 0% It's Liverpool Invest Liverpool Visit Liverpool Convention Bureau 0% It's Liverpool 201/ / /1 201/ /16 Awareness of Liverpool in London Heard about Liverpool business promotion in London Think this initiative reflects well on Liverpool 201/ /16 Think this initiative can help their business 12

13 2.7 - International Trade The number of businesses currently exporting has decreased marginally this year, from 12% to 13% but the number of businesses that are considering to do so in the future has risen from 1% to 3%. Whilst Europe remains the overwhelmingly largest export market, with 8% of exporting companies doing so to Europe, there is also notable export markets in North America, Asia and Africa. Liverpool s trading relationships are also demonstrated through businesses customer base, 38% of businesses have customers outside of the UK and 73% having customers within the UK but outside of the city region. N. AMERICA 2% EUROPE : 8% ASIA : 15% AFRICA : 10% S. AMERICA 1% AUSTRALASIA: 3% 13

14 2.8 - International Festival for Business 2016 Overall, 30% of businesses are aware that Liverpool will be hosting the IFB2016 up from 22% in 201/15, however, awareness levels are significantly higher within larger companies (51% with 50+ employees) and within the City Centre (0%). Business interest in participating in IFB2016 has significantly dropped from last year, with 21% now interested in participating compared to 37% last year. This is likely to be affected by last year s survey being run in the months immediately after IFB 201, when awareness levels of IFB201 were still high. Whilst businesses are overwhelming positive about the impact of hosting the IFB2016 on the city, businesses in North Liverpool are markedly less positive with 75% anticipating the festival will benefit the city. Larger businesses (those employing 50+) are significantly more positive about the impact on Liverpool, with a 100% anticipating benefits for the city. Businesses are less optimistic about the benefits for their business, with 27% anticipating benefits. Whilst this is still a notable proportion, 39% do not anticipate any benefits at all and 3% are undecided, converting these businesses will ensures local benefits are maximised. Of those businesses that do anticipate benefits from the IFB2016, it is through promoting their business (29%), gaining new contacts (29%) and networking (21%) that most businesses anticipate the largest impacts, whilst international expansion (3%) and generating investment (1%) are referenced much less. Awareness of IFB 2016 (%) Awareness of hosting IFB 2016 Intend to Participate IFB 2016 will benefit Liverpool IFB 2016 will benefit your business Yes No Don't Know Anticipated Benefits of hosting IFB2016 Promote business Gain new contacts Network Increased customer Expand interationally Expand into other parts of the Uk Generate investment 3% 3% 1% 7% 21% 29% 29% 1

15 SECTION 3: ANALYSIS AT AREA LEVEL Liverpool As A Place To Do Business Overall ratings of Liverpool as a place to do business, dropped slightly over the last year, after significant increases the previous year. Whilst both North Liverpool and the City Centre remained steady, the overall decrease can be attributed a significant decrease in ratings in South Liverpool. 83% of businesses in South Liverpool rated Liverpool as or 5 out of 5 last year, compared to 72% this year. This means that the highest satisfaction levels are seen within the City Centre, and despite the significant decrease in ratings in South Liverpool, North Liverpool remains least positive of Liverpool as a place to do business. Ratings of Liverpool as a place to do business, with 1 being the lowest and 5 being the highest Area Analysis South City Centre North All Liverpool or 2 out of 5 3 out of 5 out of 5 5 out of 5 % Awarding or 5 out of 5 201/ /16 South City Centre 7 7 North All Liverpool

16 3.2 Quality Indicators Despite North Liverpool experiencing improvements on all indicators, and significant improvements for Safety, Local Authority Services and Business Support & Training, performance continues to be significantly weaker than in the City Centre. Average ratings remain the most positive in the City Centre but Workforce Skills and Cleanliness have seen ratings decrease. South Liverpool has seen steady improvements in all areas apart from Safety. Quality Indicators Area Analysis City Centre North South 2015/16 Change on previous year 2015/16 Change on previous year 2015/16 Change on previous year Safety Transport & accessibly Quality of premises Cleanliness Cost of premises Workforce skills Local Authority services Business support & training

17 3.3 Prospects for Growth Reflective of overall trends, both the City Centre and South Liverpool have seen a reduction in the proportion of businesses that expect to grow over the next two years. Whilst businesses in the City Centre remain the most optimistic about growth expectations, they have witnessed the largest decrease in businesses expecting growth, from 67% to 5%. Businesses in North Liverpool are the only ones to express more confidence in growth expectations, rising from % last year to 7% but this remains below the Liverpool average of 51%. Expectations of Growth In Next 2 Years (%) Area Analysis South Liverpool 5 51 City Centre 2 5 North Liverpool All Liverpool Decline Stay the same Grow Businesses Expecting Growth 201/ /16 South City Centre 67 5 North 7 All Liverpool

18 SECTION : ANALYSIS AT SECTOR LEVEL.1 - Liverpool As A Place To Do Business Whilst overall levels of Liverpool as a place to do business has decreased slightly since last year, there has been a much more varied picture at the sector level. There have been large improvements for Other Services (+8%), Manufacturing (+17%) and Construction (+6%). There was however, a very significant fall in ratings for Business Services (-21%), the only other sector to witness a fall in ratings was the Hotels and Restaurant sector which saw a marginal fall of 1%. Ratings of Liverpool as a place to do business, with 1 being the lowest and 5 being the highest Sector Analysis Retail/Wholesale Business Services Other Services Manufacturing Hotels & Restaurants Finance Construction All Sectors or 2 out of 5 3 out of 5 out of 5 5 out of 5 % awarding or 5 out of 5 201/ /16 Retail/Wholesale Business Services Other services Manufacturing 67 8 Hotels & Restaurants Finance Construction All Liverpool

19 .2 Quality Indicators Businesses in the Finance sector had higher ratings for the city on key quality indicators than those in other sectors, especially on workforce skills. Hotels and Restaurants had positive views on safety, transport & accessibility and quality of premises. Businesses in the Construction and Transport sector were less positive on transport and accessibility, local authority services and business support & training. Quality Indicators Sector Analysis Total Construction/ Transport Finance Hotels/ Restaurants Manufacturing Other services Business services Retail/ Wholesale Safety Transport & accessibility Quality of premises Cleanliness Cost of premises Workforce skills LA services Business support & training

20 .3 Prospects for Growth Business Services and Hotels & Restaurants are most confident about their growth expectations, however, both have experienced a decline in expectations last year. All sectors are reporting a decline in growth expectations but Finance (-1%) and Manufacturing (-16%) report the most significant changes. Expectations of Growth In Next 2 Years (%) - Sector Analysis Retail & Wholesale 8 8 Business Services Other Services 9 7 Manufacturing Hotels & Restaurants Finance Construction All Liverpool Decline Stay the same Grow Businesses Expecting Growth 201/ /16 Retail/Wholesale 55 Business Services 6 59 Other services 50 7 Manufacturing Hotels & Restaurants Finance Construction 51 7 All Liverpool

21 Appendix 1 Map of Liverpool 21