Experian and Business Insider research paints interesting picture of regional economies

30 Oct 2013

A selection of research into merger, acquisition and business deal values and volumes by Experian, published by Business Insider, has revealed a mixed picture of how UK businesses are experiencing trade at this stage of the economic recovery. Broken down by area, the research presents a fascinating snapshot of the different experiences of 2013’s economic and market conditions by firms up and down the country.

The nationwide picture shows the importance of context when analysing such figures. With a total of £122bn worth of deals completed in Q3, the recovery of the UK economy would seem well underway, when compared to just £32bn in the same period last year. However, as Experian highlight, the figures are significantly buoyed by Vodafone’s £84bn sale of its stake in US venture Verizon Wireless, a figure which helped to ensure that the Q3 2013 figures totalled more than the last four quarters of deal value put together.

When such values conspire to somewhat skew the data for most firms interested in Experian’s findings, the volume of deals can prove useful to examine. Experian report that Q3 saw a 6% decline on last year, with the company’s representative noting that the volume of deals was ‘somewhat suppressed’. Looking at the figures in detail, it certainly seems as though there is regional precedent to support a more subdued outlook with the North West, Midlands, South East and Wales all reporting a fall in deal volumes.

Of those regions, it is the South East which could potentially see the most cause for concern. The fall from 209 deals last year to 159 in Q3 2013, represents a drop of around a quarter, in a market worth £87.3bn of the UK total. The South East still performs well against other areas in monetary value though, with the next region, East Anglia, registering £1.63bn of deal value.

Other regions presented reasons for optimism in the economy, with East Anglia’s figures headlining the remaining total values, as well as representing a small increase in volume of 6%. Yorkshire and the South West displayed similar rises, whilst the North East also showed a significant rise.

The North East data, in fact, typifies the ‘mixed picture’ we have been hearing regarding the economy’s progress for some time. The 48 deals in the region during the quarter – the largest increase since 2008 – reflected a willingness of businesses to pursue growth, as the region reflected a fifth straight period of economic improvement, despite deals in the SME sector reducing substantially.

Other regions also showed signs of economic growth through increased merger and acquisition activity in their more detailed figures. 12.5% of UK deals featured a Midlands aspect, for example, which put the region third behind only the larger Greater London and South East regions. In Yorkshire, business activity was boosted by a near 50% increase on inward investment, when compared to Q3 2012.

Experian reports that the pipeline values of deals likely to move forward over the next market periods also look more promising, giving a solid foundation for cautious optimism as we look to 2014 and beyond.