Business News Round Up (02/09/2022)
Scottish business confidence dips in August
Business confidence in Scotland fell 11 points during August to 5%, according to the latest Business Barometer from Bank of Scotland Commercial Banking. Companies across the country reported lower confidence in their own business prospects month-on-month, down 29 points at 3%. When taken alongside their optimism in the economy, down five points to -6%, this gives a headline confidence reading of 5%. Scottish businesses identified their top target areas for growth in the next six months as diversifying into new markets (30%), evolving their offering (30%) and investing in teams (27%). Around 1,200 businesses are surveyed each month – including 100 in Scotland – with the overall ‘balance’ of opinion weighing up the percentage of firms that are positive in outlook, against those that are negative. A net balance of 10% of businesses in the region expect to increase staff levels over the next year, up five points on last month. Overall, UK business confidence fell nine points during August to 16%, its lowest level since March 2021. Firms’ outlook on their future trading prospects was down 32 points to 5%, and their optimism in the wider economy dropped six points to 6%.
https://www.insider.co.uk/news/scottish-business-confidence-dips-august-27873468
North West firms set to seek funding – BDO
Nearly half of mid-sized businesses in the North West are intending to raise funding over the next 12 to 17 months, according to a report from BDO. The firm’s Rethinking the Economy survey found that 47 per cent of companies in the region intend to look for investment by the end of 2023, with more than a quarter accelerating fund raising plans in the next six to 11 months. The research of 500 mid-sized businesses showed that the top two sources of funding for North West businesses are debt finance (38 per cent) and public markets (29 per cent). Government-backed schemes, such as Future Fund and Innovate UK, as well as investment trusts/VCTs also on the financial radar. James Fieldhouse, M&A managing director at BDO in the North West, said: “Regional businesses are facing a plethora of challenges that keep on mounting in the face of an impending recession. Despite this, there is still a clear appetite to seek and secure investment, as businesses look towards multiple sources of funding to meet strategic aims. With the investor market equally as ambitious in the region, eager to support entrepreneurial companies that wish to scale up at pace, we expect this level of interest by companies to have a positive effect on investment activity in the North West over the coming 12 to 18 months.”
https://www.insidermedia.com/news/north-west/north-west-firms-set-to-seek-funding-bdo
UK growth to outpace Scotland for 50 years
Scotland’s policy makers face some stark long-term choices after new data from a key government forecaster said economic growth will lag behind the UK average for the next 50 years. The population and those of working age are expected to shrink, putting pressure on the tax base to grow the economy and support a rise in older people. According to the Scottish Fiscal Commission (SFC), which provides data for government ministers, Scotland’s population will fall by 900,000 or 16% to 4.6 million by 2072. Over the same period, the UK population will decline by 2%, from 67.1 million to 65.9 million. By 2072, the proportion of the Scottish population in the 16 to 64 age bracket will fall from 64% to 56%. The falls, which are due to a predicted lower birth-rate and a decrease in net migration, will mean a lower tax take and will put more pressure on policy makers, says the SFC. In particular, the shrinking working age group will need to support an increasing number of older people. Those aged 65 will rise from 20% to 32% of the population. The birth-rate is projected to shrink by more than a third (36%), equivalent to 17,100 fewer births. Net international migration is likely to remain at about 4,100 a year. These demographic changes will mean Scottish gross domestic product (GDP) will average about 0.9%, compared with 1.4% for the UK.
North West business confidence highest in the UK
Business confidence in the North West was the highest of all the UK regions and nations during August. Confidence levels rose 26 points during the month, to 44%, according to the latest Business Barometer from Lloyds Bank Commercial Banking. Companies in the region reported lower confidence in their own business prospects month-on-month, down 39 points at three per cent. When taken alongside their optimism in the economy, up 33 points to 38%, this gave an overall confidence reading of 44%. A three-month average of local businesses’ confidence scores reveals a net confidence score of 35%, factoring in monthly scores of June, July, and August. The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. The overall ‘balance’ of opinion weighs up the percentage of firms that are positive in outlook against those that are negative and gives a net balance on a scale of -100 to 100. North West businesses identified top growth opportunities for the next six months as investing in their teams (55%), diversifying into new markets (30%) and evolving their offering (29%). A net balance of 43% of businesses in the region expect to increase staff levels over the next year, up 17 points on last month and also the highest in the UK. Overall, UK business confidence fell nine points during August to 16%. Firms’ outlook on their future trading prospects was down 32 points to 5%, and their optimism in the wider economy dropped six points to six per cent. The net balance of businesses planning to create new jobs also decreased five points to 16%.