Businesses in the East of England believe the recruitment of more staff will be key to driving future commercial growth, according to the latest research from Clydesdale Bank.

More than 40% of businesses identified an enlarged workforce as the top priority, given a more flexible approach from their lender, followed by acquisitions and mergers, and expansion of their premises (both 26%).

The research also found that nearly half (46%) of East of England businesses plan to reinvest at least 6% of turnover back into their business for commercial growth next year.

One in five companies (20%) plan to invest more than 10%, although nearly a third (29%) said nothing had been earmarked for growth.

The survey found that most businesses had delayed either salary increases (45%) or recruitment (37%) in the past year because of the economic climate.

Martin Guildford, managing partner at Clydesdale Bank’s Financial Solutions centres in Cambridgeshire, said: “From the research it is clear businesses are telling us that their investment and capital expenditure plans remain uncertain over the next 12 months. The decision of when and how much cash to invest back into a business is very important. These results indicate that the majority of businesses are planning a relatively conservative spend in the next 12 months.”

The research showed that a third of businesses (32%) in the East of England cited a lack of cashflow for delaying investment in the past year. A further 30% spoke of the perceived financial risk in the current climate and another 26% deemed the preservation of working capital as more important.

One in four (25%) said a more flexible approach by their bank would allow their business to take advantage of growth opportunities in the next 12 months.

In response to customer demand, Clydesdale and Yorkshire Bank recently launched a new business support initiative – Investing for Growth – to help successful businesses grow and develop by easing their cashflow pressures. The initiative, which follows the banks’ October pledge to advance up to £10 billion of new lending over the next two years, offers both new and existing business customers a dedicated planning service and a more flexible approach to lending.