Mid-market companies in Yorkshire created 21,000 jobs last year, according to new research from accountancy and business advisory firm BDO LLP.
The BDO Yorkshire Report 2016 highlights the vital role that medium-sized businesses play in powering the regional economy.
The group of 200 mid-market companies doubled business investment over the period to £2.8bn and they strengthened their balance sheets by boosting net cash by 30 per cent to £1.1bn, which should help them to withstand any downturn.
The research also suggests that mid-sized businesses are becoming more productive, and working smarter to create more wealth with the same amount of input. The group is dominated by manufacturing, with 61 manufacturers in the 200, underlining the strength and importance of the sector in Yorkshire.
The report from BDO comes with a challenge to Yorkshire’s politicians to support the region’s growth.
The business advisory firm has warned of a divide developing in the North of England, as politicians in Yorkshire continue to argue over the devolution of powers from Westminster.
Jason Whitworth, the mergers and acquisitions partner at BDO in Yorkshire, said that Yorkshire must not allow itself to be left behind: “Businesses are proud to invest in Yorkshire but there has to be a quid pro quo. Politicians need to consult with businesses about how to take the region forward and draw on external funding available from the Government.
“We seem to be locked in debate over the division of political power in Yorkshire while Manchester is moving ahead with billions of pounds worth of devolution deals covering transport, skills and health.”
Mr Whitworth added: “We need to inject a sense of urgency and importance into the local government debate and help create the conditions for devolution to start delivering real benefits to the region.
“The High-Speed 2 rail link and the genuine implementation of the Northern Powerhouse may be decades away, but investors and businesses are likely to make long-term investment decisions based on the direction of travel.”
The BDO Yorkshire Report 2016 analysed the business performance of the region’s top 250 firms using the latest data from Companies House.
The study shows they are in fine form. The top 250 reported a 4 per cent increase in turnover to £106.2bn, an 8 per cent increase in operating profits to £4.8bn and a 9 per cent decrease in dividends.
As well as increasing investment, the top 250 also put aside more money, raising net cash by 40 per cent to £4.5bn.
Average director remuneration rose by 21 per cent to £215,000. Employees in the top 250 were rewarded with an inflation-busting 7 per cent rise in average wages, a welcome rise for households.
Mid-market companies are driving economic growth with the top 200 vastly outperforming the largest 50 firms. Their profitability soared by 200 per cent to £861m, based on a 10 per cent increase to £24.4bn in turnover.
The top 50 managed just a 2 per cent increase in turnover, a performance heavily influenced by the presence of the retailers Asda and Morrisons which are facing unprecedented price pressures from rival grocers.
The manufacturing sector dominates the top 250 group with more than twice as many representatives than any other group.