There may be concerns about a recovery that is based on a housing bubble and consumer spending but Stafford Sumner, managing director of Falmouth digital marketing agency Jarrang believes that businesses are now starting to invest.
One of the features of the recession was a sudden and dramatic drop in levels of business spending as many firms made deep cuts to their operating costs as income levels fell off.
Mr Sumner said that consumer spending had been slowly picking up for the last few years, with business spend much slower to come through.
“There’s definitely been an improvement in the outlook which is a lot better than it was 12 months ago,” he said.
“We’re based in Cornwall but we work all over the UK. In the middle of last year it was very noticeable, particularly in the South East that things were picking up. Clients were willing to invest more in their online marketing and that’s been slowly spreading across the whole of the country.
“I think it has reached the South West and I think people are more willing to make bigger decisions than 12 months ago. Over the previous four years people were not willing to commit to things but now we’re seeing people looking to commit to longer term contracts than they were before. They used to sign
12-month contracts and now people are signing two to three-year contracts.
“People have been putting off website or e-commerce builds, they have been make do and mending for the last two years and now we’re seeing big projects going out to tender. It’s all a sign that people have got more confidence.”
Mr Sumner formed the online marketing business after moving from London back to his native Cornwall in 2003. It has a client base which includes the Duchy of Cornwall, Mitsubishi and UK Trade and Investment.
Mr Sumner welcomed Bank of England Governor Mark Carney’s approach to holding interest rates until unemployment falls, saying this gave consumers and, ultimately, businesses much-needed reassurance.
“Saying to businesses ‘you can invest, even if it’s just for 12 months’ I think that creates confidence,” he said.
But he was critical of high street banks.
“I think with access to crowdfunding, businesses now have more inlets for investment than before. I don’t think the big four banks in particular are helping business very much. My own opinion of banks from personal experience is that they are worse now then in the midst of recession.”
“In 2010 they were quite amenable and I was surprised by that. As we have come out of the recession I’m finding that the attitude of the high street banks with regard to the business community is that they have become more risk averse.”
Mr Sumner said that the South West had huge opportunities around higher education and digital marketing and he urged more support for the tourism sector.
“The public sector bods tend to ignore tourism but it’s a fact that the South West is a very popular tourism destination. Spending on tourism is a massive opportunity that we need to nurture. The more tourists we have coming in staying in hotels and B&Bs, the more money will be spent in the local economy,” he said.
Transport links also remained a concern, he said, particularly rail and air links.
“I’m concerned about the difficulties with trains between Cornwall and London and the uncertainty over air routes,” he said. “I have got admiration for the airport (Newquay) – they are trying to keep Cornwall’s air links open and I think that’s good for them but traditionally road, rail and air links have all been sub-standard.”
And Mr Sumner called for an end to “an over-reliance” on grant funding in Cornwall in order for the county’s economy to prosper. “We will get this next round of European funding but the chances of it happening again are slim. We have got to wean businesses off grant funding because it’s unsustainable and some businesses have only survived because there is grant money. We need to instil more of an entrepreneurial approach.”