Yorkshire area continues to enjoy strong employment

18 June 2015 Consultancy.uk

The largest 250 by revenue companies in the Yorkshire area continue to perform well, with particularly the top 200 mid-sized businesses enjoying revenue growth of 13.2% and profits up by 2.9%, research by BDO shows. Employment is up as well, with a total addition of around 30,000 jobs since last year. Technology and media companies in the region are the main stars this year, enjoying a 20% increase in profit before tax and adding 18% more staff to the payroll.

In a recent report from BDO, titled ‘The Yorkshire Report 2015’, the professional services firm explores the Yorkshire region in terms of the current economic vibrancy of its 250 largest businesses by revenue between 2013 and 2014, and compared the aggregated total with last years’ results. The top 50 of the selected 250 are the larger organisations operating in the region, while the following 200 are considered mid-tier companies. The majority of businesses are found in West Yorkshire region, with the most based in Leeds and Sheffield.

Company profile

Yorkshire Regional statistics
In terms of raw numbers, businesses in the region are doing well. The report finds that turnover for the Group has increased 6.9% on last year, hitting £102 billion, up from £96 billion the year before.  Their profits fell however, by -2.5%, from £2.34 billion to £2.29 billion. The total number of people working for large and mid-sized firms grew by 4.9%, up from 591,000 to reach in 620,000 2014.

Particularly the mid-market firms have had a good year, with overseas revenue for the segment growing 19.3% while domestic turnover jumped 13.2%, the number of employees growing 11.6% while profits were up by 2.9%.

Yorkshire regional growth between 2012 and 2014

Manufacturing success
One sector that has continued to flourish in the region is manufacturing, representing 72 of the 250 Group. The sector earned a third of Group profits, generated half of international sales and employs 72,956 people. The sector managed to use the macroeconomic upturn in the region to turn a profit on flat revenue. While the sector has done relatively well, downside risks remain. These include the increasing value of the pound against the Euro and other international markets making export less competitive, as well as cheaper oil prices reducing the demand for goods manufactured that are related to the oil business.

The report also highlights that the region continues to perform well on the international stage, even with the potential headwind from currency exchange rates and goods types. The region as a whole, including the manufacturing sector, grew considerably over the past year, with turnover from overseas hitting £9.5 billion, up 7.7% on last year’s £8.8 billion. The region too remains well connected with over-seas clients and economic zones, with 58 of the 250 businesses owned by foreign companies.

Sector summary

Technology & media and mobile
While manufacturing is enjoying stable function within the confines of the changing fortunes of the UK and international monetary and system, telecommunications and media have also communicated and performed strongly within the Yorkshire region. The region enjoyed levels of competitive growth, with the technology and media sector seeing a 19.8% increase in profit before tax and an increase in turnover of almost 8%.

While investment levels in technology have been healthy in recent years, another recent BDO report highlights that nearly a third (31%) of UK mid-market technology and media companies believe that the availability of finance over the next five years to fund innovation projects would restrict their plans for growth. Although 45% see financial access as their biggest barrier to growth, the research also highlights that three-quarters are optimistic about medium-term prospects.

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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.”