Business News Round Up (02/02/23)
Manchester office rents to rise as decline in home working drives rush for quality space
Manchester’s office market significantly outperformed all other regional cities in 2022, with predictions that a rapid decline in home working this year is leading to a rush for quality space. The annual UK Cities Report from Knight Frank said occupiers are zoning in on high quality, amenity-focused accommodation with strong sustainability credentials, and it revealed the city saw a 1.2 million sq ft take-up of space – almost double that of Birmingham – with the highest level of investment at £438m outside of the capital. A lack of supply of Grade A space coming online could push rents – which tipped £40 per sq ft last year and are already nudging £42.50 per sq ft – up to £45 per sq ft this year as occupiers seek out the best spaces. The flight to quality marks a renewed commitment to office culture with firms recognising the office is the place for connection, collaboration, corporate culture, and training. David Porter, head of office, Knight Frank, Manchester, said: “We question the business model of firms who adhere to a predominantly work from home policy. It was a pandemic necessity, and while some flexibility will always remain, the first port of call for employees should be the office. We are increasingly seeing the emphasis shift back, with the more fleet-footed firms taking the best spaces as they become available and encouraging employees back and reaping the rewards in many ways – staff training and development, succession, increased collaboration, and better employee welfare.
Scottish businesses ‘prioritise investment in digital efficiencies’
In 2023, mid-sized businesses in Scotland will prioritise investment in digitalising services and driving new efficiencies through automation. That’s according to research from accountancy and business advisory firm BDO, which also found that the Scotland’s business leaders are calling for increased action and more targeted support from the government. They require new policy frameworks for recruitment and workforce up-skilling, as well as new trade agreements to create opportunities for market growth and exports. Fiscal pressure remains a concern and unsurprisingly, businesses would like to see reduced VAT and fuel duty, as well as further financial support for energy bills. Martin Gill, head of BDO in Scotland, commented: “Businesses are more optimistic going into 2023 than they were this time last year and almost half (44%) expect inflationary pressures to ease in the first half of the year. This sets a positive tone, but some business priorities have been delayed because of the squeeze on costs.” Sustainability tops the agenda, with 30% of Scottish businesses set to introduce enhanced ESG measures. However, the current backdrop has put a pause on improving green credentials for some, with almost half (44%) delaying measures to address climate change.
https://www.insider.co.uk/news/scottish-businesses-prioritise-investment-digital-29093963
True effects of late payments on SME owners revealed by Small Business Survey
A survey jointly conducted by two leading UK Debt Collection agencies has revealed the true extent of the effects of late payment on the nations local Small Business owners. As the economy continues to remain unstable in the post pandemic era, there has been an increase in late payments to Small Businesses across the UK. The survey collaboratively done between leading Debt Collection Agencies Federal Management and Frontline Collections, has revealed that 79% of the Small Business owners surveyed said their mental health suffered as a result of Business late payment. The majority of smallest businesses (less than 5 employees) said they are constantly worrying about not being paid at all. Small Local Business owners are being exposed to stress, financial worries, insomnia, depression and have even seen personal relationships affected by the problems late payment is causing them. 41% of SME owners said that late payment had caused them issues outside of work.
Profit warnings from listed NW firms rise
Profits warnings issued by listed firms in the North West increased in 2022, according to a new report. EY-Parthenon’s latest Profit Warnings report. showed profits warnings rose by 31 per cent, from 26 in 2021 to 34 in 2022. The 2022 total was the North West’s highest since a pandemic-affected 2020 and was slightly higher than experienced in 2008, during the global financial crisis, when 33 warnings were issued. Similar to the region’s 2021 experience, retail was the North West’s most significantly affected sector in 2022, with a total of 10 retail profit warnings issued during the year. This was consistent with national trends, with the retail sector issuing the highest number of UK profit warnings. Q1 2022 experienced the highest volume of profit warnings in the North West last year, with 15 issued in total. While a quarter-on-quarter fall in warnings from eight to five in Q4 2022 was not enough to prevent a substantial year-on-year rise. Sam Woodward, EY-Parthenon UK&I turnaround and restructuring partner in the North West, said: “2022 has been a challenging year for businesses across the UK, including here in the North West, with economic headwinds significantly affecting costs, consumer spending habits, supply chains and more. The impact of the cost-of-living crisis left the retail sector and consumer-facing companies facing an array of challenges throughout 2022, which is reflected in the North West’s profit warning figures.”
https://www.insidermedia.com/news/north-west/profit-warnings-from-listed-nw-firms-rise