Survey points to expansion in the UK

Three out of four UK-based companies surveyed are planning to expand their businesses, with 80 per cent planning to expand in the

, according to a survey of property managers by the

and property advisers

.

The survey published today also shows that a significant number of companies are considering expanding some of their activities in foreign locations, in particular China and India.

Forty-two per cent of those planning expansion outside of the UK stated that they were considering Europe, a third of these citing Eastern Europe as their preferred location. More than 30 per cent of responses were considering Asia, with the majority of these naming China or India.

Eighty per cent of UK companies that are considering expansion in the next two years are targeting the UK, with 35 per cent considering expansion in other countries. Some 15 per cent were therefore considering expansion both in the UK and abroad, with 20 per cent only looking overseas.

The research also found that 19 per cent of UK companies surveyed were considering moving existing business units overseas. Amongst these, the most significant driver was ‘cost reduction’, at 57 per cent. Twenty per cent of respondents cited ‘access to new markets’ and the same number stated ‘access to skills base’. Fifty-three per cent of companies considering relocation of business units were considering Asia, of which half cited China and a quarter, India.

“This survey indicates that the UK retains its position as a business location of choice, supported by its flexible labour market and economic stability,” commented Robin Worthington, Chair of the CBI Property Group. “But the CBI is concerned that with a growth in business regulations, a cumbersome planning regime, and significant problems with UK transport infrastructure and basic skills, our competitive advantage is being steadily eroded. India and China are clearly being targeted increasingly by businesses, both for expansion and relocation."

One of the important findings of the survey is that there are more global regions that companies are prepared to expand in than relocate business areas to. This appears to be primarily a result of their objectives - expansion is primarily to access new markets, whereas relocating business units is to reduce costs. Relocation is likely to concentrate in China, Eastern Europe and India, whereas expansion will also include Western Europe, North America, The Middle East and Australasia.