Business News Round Up (01/07/2021)
UK economy contracted by 1.6% as people saved at record levels, figures show
Britain’s economy suffered a bigger hit than first thought between January and March as the coronavirus lockdown took its toll and households saved at record levels, according to official figures. The Office for National Statistics (ONS) said gross domestic product (GDP) – a measure of the size of the economy – contracted by 1.6% in the first quarter, compared with the previous estimate of 1.5%. This means GDP was 8.8% below its pre-pandemic levels at the start of the year, against the 8.7% initial estimate. But despite the first quarter revision, the contraction is still far less than the 20% plunge seen during the initial lockdown in spring 2020 as the economy becomes more resilient – and GDP has started recovering strongly.
Business confidence has fallen slightly in the North West this month, but remains on positive standing
Business confidence in the North West fell nine points during June to 29%, according to the latest Business Barometer from Lloyds Bank Commercial Banking. Companies in the North West reported lower confidence in their own business prospects month-on-month, down six points to 25%. When taken alongside their optimism in the economy, down ten points to 34%, this gives a headline confidence reading of 29%. The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide. When it comes to jobs, a net balance of 15% of businesses in the region expect to increase staff levels over the next year, up two points on last month. Overall UK business confidence remained steady month-on-month at 33%. Firms reported a small increase in their business prospects up two points to 30%, the highest reading since September 2020. Confidence in the economy dipped marginally by two points to 36%. Across the UK all regions and nations reported positive confidence readings for the third consecutive month. Businesses in Scotland (up 27 points to 42%), London (up 17 points to 41%) and the East of England (up ten points to 36%) reported the highest increases in overall confidence.
Rebound of family businesses critical to the rebuilding of the UK economy
The rebound of family businesses post-pandemic will be critical to the rebuilding of the UK economy, a new report has shown. The latest report by the IFB Research Foundation (IFBRF) reveals that in 2019, family businesses contributed to almost 30 per cent of the UK’s national income. Over 100,000 new family businesses were created in the year running up to the pandemic, with 5.2 million family firms in total who employ over 14 million people in the UK. Sir Michael Bibby, Chairman of the IFB Research Foundation, said: “This latest report from the IFB Research Foundation shows how, before the COVID-19 pandemic, family businesses were playing a critical role in the UK economy. The evidence highlights how the sector had been performing well and was largely optimistic about the future. The pandemic is likely to have had a dramatic impact on the outlook, and expectations of many UK small and medium-sized enterprises and this report will give us a great base from which to analyse the changes especially given some of the sectors in which family firms are most concentrated have been those hardest hit by COVID 19. It is interesting to note that the analysis also shows that family ownership does not affect the uptake of technology and so productivity, which is more correlated with the size of the company than the ownership.”
Scale Up Scotland inviting applications
Entrepreneurs looking to scale their business are being invited to apply for the next Scale Up Scotland programme founded by The Hunter Foundation and Entrepreneurial Scotland. Free to successful applicants, the programme is recruiting its third cohort, having supported 36 businesses to date. The 18-month programme supports businesses with the potential and desire to grow sales beyond £20 – £30 million. In the last year total revenue for businesses in the second cohort grew by over 100% to £54 million and job creation was up 80%, despite the impacts of Covid-19. The programme offers a blend of experiential, business, and peer-to-peer learning, taking entrepreneurs through the critical components of business scale-up. Those taking part will learn from domestic and international business leaders.