Business News Round Up (01/02/2021)
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UK factory growth slows as COVID and Brexit combine – IHS Markit
A gauge of British manufacturing growth was its slowest in three months in January as the combined impact of COVID-19 and Brexit weighed on new export orders, and there were signs of disruption of supply chains and mounting inflation pressure too. The final IHS Markit/CIPS manufacturing Purchasing Managers’ Index fell to 54.1, higher than a preliminary reading for January of 52.9 but down from a three-year high of 57.5 in December, when factories rushed to beat problems when Britain’s new trade relationship with the European Union began on Jan. 1. Smaller manufacturers were particularly hard-hit, the survey showed.
Only small number of SMEs in Scotland confident of future growth after pandemic
Small Scottish firms appear to be the least likely in the UK to predict any form of improvement over the next three months.Scotland-based small and medium enterprises (SMEs) appear much less positive about business growth than the rest of the UK, according to new research.Data released by Hitachi Capital Business Finance suggests that Scottish SMEs are around half as confident about growth as areas such as London.Overall, 26% of small business owners in the UK predict growth in the next three months. However, only 17% of owners in Scotland expect growth over the same period.Whilst directors in the finance/accounting (40%), media/marketing (36%) and IT/telecoms (36%) sectors drive UK growth predictions, the Hitachi Capital data also revealed areas of concern.
Start planning now for opening up the economy says CBI
The CBI is today urging the Government to work with business to best identify economy-critical elements to its roadmap out of the latest lockdown in England. With Government plans to publish its exit strategy expected in late February, the UK’s leading business group is already consulting its members on how best to safely reopen the economy. In a letter to the Business Secretary, Kwasi Kwarteng MP, the CBI’s Director-General, Tony Danker, says that: “With health teams rightly in crisis management mode, we in business along with the economic ministries can use this time to plan for a successful re-opening of the economy when the moment is right to do so.” The CBI identifies at least 6 elements that will help firms plan and prepare in advance of a lifting of restrictions. The letter is not attempting to set a specific date for re-opening as we must rightly be driven by health data. Confirming once more what will be considered low, medium, or high-risk economic activity, so that businesses can understand what will open sooner or later.
Commercial property investment volumes weak in 2020 but rebound predicted
Investment volumes in Scotland totalled £1.3bn last year, down from £2.1bn in 2019 and the weakest annual figure since 2012, largely due to the impact of pandemic lockdown measures. But with some sectors performing well, a rebound is expected this year, according to new analysis from Colliers International. Colliers International’s Scotland snapshot, covering the final quarter of last year and giving an early outlook for 2021, said that following an understandably difficult 12 months, dominated by Covid-19, the picture is becoming more positive. Despite the overall drop in investment last year, the alternative sector had a record year with volumes reaching £458 m, more than double the five-year annual average of £221m. Colliers explained this was largely the result of strong demand for residential assets. Its analysis found that investor appetite was also strong for distribution warehouses and business parks, both of which exceeded their respective five-year averages.