Business News Round Up (02/05/2023)
UK business confidence recovering but ‘dark clouds’ on horizon
UK business confidence is being restored after plummeting at the end of last year, but “dark clouds” are on the horizon as costs remain high, according to a new report. Sentiment improved among small business owners and sole traders over the first three months of the year, a welcome step for the wider industry, the Federation of Small Businesses found in its survey. Nevertheless, the FSB’s confidence measure scored minus 2.8 points in the first quarter of the year, which means more firms felt pessimistic than optimistic. But it was substantial improvement from the confidence slump in the final quarter of 2022, which had a negative reading of minus 45.8 points as retailers and hospitality firms were struck by higher costs and dampened consumer spending. The FSB, which represents more than 150,000 business owners and self-employed workers, surveyed nearly 700 people in the latest iteration. It found a major uptick in confidence among sectors including retail, accommodation, food, and manufacturing in the latest survey, although they all remained in negative territory. Meanwhile the tech and science sectors were leading the way with a positive confidence reading of 14.9 points.
Rising costs force 12 venues to close per day
More than a dozen hospitality venues closed every day over the past 12 months as businesses struggled with rising costs. The sector suffered a net decline of 4,593 or 4.3% of licensed premises in the year to March, an average of 12.6 per day, with independent businesses bearing the brunt of the closures with a 5.9% drop while managed groups grew by 1.5%. In the three years since the start of the COVID-19 pandemic, the independent sector has shrunk by 14.1% – more than four times the contraction of 3.3% in the managed sector. It reflects both the vulnerability of small, mostly family-run businesses in the face of COVID and the cost of living crisis, and the resilience of better resourced pub, bar, restaurant, and hotel groups. There has been a 30.6% contraction in the nightclub sector since March 2020. However, more encouraging news from the Hospitality Market Monitor from CGA by NIQ and Alix Partners indicates the rate of closures has slowed in the last quarter. Net closures slowed to 756 venues in the first three months of this year—a quarter-on-quarter drop of 0.7%, and equivalent to 8.4 closures a day. The 12-monthly figures show a much steeper drop in restaurants (down 7.8% since March 2022) than food pubs (down 2.2%) and high street pubs (down 2.5%).
https://dailybusinessgroup.co.uk/2023/05/rising-costs-force-12-venues-to-close-per-day/
North West business confidence grows strong as firms eye growth in new markets
Business confidence in the North West fell one point during April to 34%, 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 one point at 34%.
When taken alongside their optimism in the economy, down one point to 34%, this gives a headline confidence reading of 34%. North West businesses identified their top target areas for growth in the next six months as investing in their team (42%), investing in sustainability (35%) and diversifying into new markets (28%). The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. A net balance of 33% of businesses in the region expect to increase staff levels over the next year, down 12 points on last month. Overall, UK business confidence climbed one point to 33% in April. Every UK nation and region reported a positive confidence reading and six out of 11 regions recorded a higher reading than last month. London reported the highest levels of business confidence at 47% (up nine points month-on-month), followed by East Midlands (up 18 points) and North East (up three points), both at 41%.
Number of female-led Scottish companies rises, according to new study
The number of female-led companies in Scotland has risen, according to the annual large-scale UK-wide study into female entrepreneurship. Scotland maintained its status as having one of the highest proportion of fast-growth female-led companies in the UK, only second to Wales (12.1%). There was a modest increase in the proportion of incorporated female-led companies in Scotland, from 19.16% in 2021/22 to 19.4% in 2022/23. Created by the leading data analytics platform mnAi, The Gender Index is an AI-powered research of all 4.5 million active companies which accurately measures the number of female-led companies and their impact on the economy. An added layer that the mnAi analysts have incorporated into this year’s data is identifying company leadership among underrepresented groups and young people. Much more work remains to be done to level up Scotland with the rest of the UK in terms of female-led companies headed up by ethnic minorities. Ethnic minority female-led companies account for 22.9% which equates to 3.5% of all companies in Scotland – much lower than the UK average of 6.6%.