Top 50 mid-market players of Worcestershire see revenues hit £2.4 billion

14 November 2017 Consultancy.uk

Worcestershire’s mid-market continues to boom, with the revenues of the region’s 50 top players increasing by half a billion in 2016. The manufacturing and precision engineering and retail sectors led the charge, with both adding considerably to the regional economy and employment.

BDO’s latest report into the health of the Worcestershire mid-market regional economy highlights strong growth, particularly in the manufacturing segment. The regional economy has been boosted by a range of factors, including support from Local Enterprise Partnership (LEP) and Herefordshire & Worcestershire Chamber of Commerce, each of which has worked to support regional business, from infrastructure roll-outs to company financing. Presently, Worcestershire’s top table of businesses seem to be among the most bullish in the UK, with the region’s top fifty mid-sized businesses enjoying substantial growth, seeing total revenue hit £2.4 billion. That accounted for a rise of £500 million from £1.9 billion the previous year.

While their growth was still eclipsed by the growth enjoyed by groups from Derbyshire in the same period, they are now growing more rapidly than the top businesses of Yorkshire. Earlier in the year, BDO reported that Derbyshire, which had seen the total revenue of the top 50 small to mid-sized businesses grow steadily over the past three years, recorded total revenue at the firms increased by almost 70% from £2.3 billion in 2014, to £3.9 billion last year. In Yorkshire, contrastingly, while the top fifty players continued to dominate the area’s total revenues, at £82 billion, a decline of 2% was noted since last year.

Turnover and employee growth per district

The increase in turnover of Worcester businesses as a whole was spread across varying districts, although not all districts managed to boost their respective economic output equally. Wyre Forest saw the biggest increase by far, up more than £200 million in turnover, from £394 million to more than £600 million. The region continues to punch above its weight, home to 18% of companies but 25% of revenues. Redditch also enjoyed strong growth, with district turnover increasing from £556 million to £675 million. Top 50 companies situated in Malvern Hills saw relatively small growth, with district revenue up from £22 million to £24 million.

Employment figures were less pronounced in increase among the districts, despite all districts witnessing an increase. Worcester City saw, relatively, the largest number of new employees – up from 1605 in 2015 to 2189 last year. Wyre Forest also demonstrated an increase of almost 600, to 4601, while Redditch saw more than 400 join the ranks, hitting 2891 employees in total.

Turnover and employee growth per sector

In terms of the type of top 50 medium-sized business that has seen the most significant increase in turnover from the previous year, manufacturing and precision engineering lead the pack, with revenue increasing from £558 million to £782 million. The retail sector saw strong revenue growth too – supported by increased employment across the region – with turnover up from £522 million to £672 million. Real estate & construction went through a modest uptick in revenues, to £220 million, while transport, healthcare and financial services remained relatively flat. Professional services experienced modest growth, up from £336 million to £368 million.

The rise in manufacturing and precision engineering, and retail revenues, meant both sectors added considerably to their respective workforce numbers. The former added more than 800 to its ranks, while the latter almost 900. Professional services, meanwhile, saw their rank increase by close to 100, while healthcare and social care saw a decline of around 20 personnel over the period.

Top 25 companies by revenue growth

Top 25 players

The top 25 of the top 50 medium sized business saw five companies whose revenues increase by more than 50% on the previous year. Lioncourt Homes, centred in Worcester City, saw revenues jump by 123%, while Victoria, a manufacturing and precision engineering firm, takes the number two spot with a revenue increase of 89.3% to £255 million. Grey Technology, in Worcester City, saw an increase in revenues of 78.3%.

Manufacturing and precision engineering firms dominated the top 25, with 8 entries, followed by retail, with 7 entries. Real estate and construction, while having relatively lacklustre growth overall, manages 6 entries in the top 25, while financial services sees two entries.

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Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.

Outlook

Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”