Hertfordshire businesses have delivered another strong year of growth with increases in turnover, profitability and employment, demonstrating strong resilience during a period of significant political and economic uncertainty, according to a new report published this week.

The annual Hertfordshire Limited study, conducted by financial and business advisers Grant Thornton, analyses the performance of the 200 largest, privately owned companies in the county to provide a recognised benchmark of the overall health of the local economy.

Read the full Hertfordshire Limited 2018 report

Headline results

The 2018 findings, unveiled to local businesses at a breakfast event hosted by Grant Thornton at Hatfield House, revealed that combined turnover of the top 200 companies increased by a healthy 13.1% from £14.1bn to just over £16bn.

Overall Profits (measured by EBITDA – Earnings before interest, tax, depreciation and amortisation) rose by an impressive 16.9% from £819 million to £958 million with both large and smaller businesses experiencing a meaningful upsurge in their trading performance.

Employment in the county also remained strong with the top 200 businesses growing their combined workforce by just under 1% to 93,871 with a pronounced increase in average wages which rose by 3.4% to £27,391.

Mark Bretton, Chair of Hertfordshire LEP, said: "The publication of this report has become one of the most significant business events in the Hertfordshire business calendar. This year, there is the added significance that it will be the last report in a series dating back to 2013, that takes the pulse of Hertfordshire’s privately owned businesses whilst the UK remains a full member of the European Union. Its importance should not be lost on our business leaders, being the report against which we may, in future, benchmark the impact of the UK’s departure from the EU on the county.

"What is interesting about this years’ report is that it reveals a widening gulf between the performance of our larger corporates compared to our SMEs. This has been reflected elsewhere in other studies such as the 2018 LEP Growth Dashboard, which highlighted slower incidences of growth in Hertfordshire’s SME sector compared to other LEPs. This has been a recurring feature of our economy since we wrote about “the missing middle” in our first Strategic Economic Plan, and is something that we are committed to address.

"At the LEP, we look forward to playing our part in meeting the productivity challenge and will deliver a Local Industrial Strategy that invests in science, research and innovation; develops skills for the future; cultivates world-leading sectors; regenerates our lagging towns; and supports the scaling of our SMEs. Whilst these are not insignificant challenges, we look forward to working closely with our partners in the private sector to address these challenges head on."

Jeremy Read, from Grant Thornton St Albans, who presented the findings, said: "It's positive to see businesses performing strongly across the board and is a real testament of their resilience and determination to achieve growth even in an uncertain market with ongoing negotiations with the EU. It's evident from the report that Hertfordshire continues to be a fantastic place for business.

"Whilst a lot could change in the lead up to the March 2019 Brexit deadline, businesses in the region are well placed to overcome any challenges which are thrown up and have every reason to be confident about the future."

Sector performance

The Hertfordshire Limited report also analyses the performance of the top 200 companies by sector. Impressively, all eight sectors reported an increase in turnover and profitability highlighting a consistent picture across the board.

The standout sectors were Technology, which saw the biggest turnover growth of 23% as businesses take advantage of rapid changes in the industry requiring a specialist skill set, and Food, Drink and Leisure which posted a 43% rise in profitability despite the exposure to currency fluctuations and consumer confidence. Elsewhere Business Support Services, the biggest sector in terms of total turnover, remains a key part of Hertfordshire's economy and continues to diversify across a range of services, resulting in turnover, profitability, employment and average wages all increasing.

Jeremy concluded: "Hertfordshire is home to a dynamic, thriving business community and, as we see from this report, companies continue to flourish across a broad range of sectors, demonstrating an overall robustness of the Hertfordshire economy.

"Businesses are however struggling to recruit the necessary skills to sustain their growth as the UK reaches so called 'full employment' which partly explains the increase we have seen in average wages as firms look to attract top talent. Companies should also look to take full advantage of the Apprenticeship Levy as a low cost way of upskilling future talent to ensure they have the workforce they need to succeed in the future."

The findings were presented at Hatfield House on 9 November and this year's event included guest speakers Adrian Hawkins, Chairman of Weldability Sif and Hertfordshire LEP Deputy Chair; Dr Sally Ann Forsyth, CEO of Stevenage Bioscience Catalyst and Hertfordshire LEP Board Member; and Keith Thompson, CEO of Cell and Gene Therapy Catapult.