Business News Round Up (02/10/2023)
Revisions show UK economy no longer the post-pandemic laggard
Britain’s economic performance since the start of the COVID-19 pandemic has been much stronger than previously thought, with faster growth than Germany or France, according to revisions to official data released on Friday. Britain’s economy in the three months to the end of June 2023 was 1.8% larger than in the final quarter of 2019, the last full quarter before the start of the COVID-19 pandemic, the Office for National Statistics said. This represented a big upward revision from the most recent previous ONS estimate, made on Aug. 11, that the economy was still 0.2% smaller than before the pandemic, which had placed it at the bottom of the table among major advanced economies. An increased estimate of the size of Britain’s economy had been widely expected, after the ONS published preliminary revisions on Sept. 1 suggesting the economy was already 0.6% larger than its pre-pandemic size in the final quarter of 2021. Britain’s relative economic performance since the pandemic and its departure from the European Union has been a focus of political debate, especially with a national election likely next year. “People doubted the strength of the UK economy – today’s data proves them wrong,” Prime Minister Rishi Sunak said on social media as he prepared to head to his Conservative Party’s annual conference. Britain’s gross domestic product (GDP) growth of 1.8% over the period exceeds growth of 1.7% in France and 0.2% in Germany but trails far behind the 6.1% expansion seen in the United States and is also weaker than in Japan, Italy or Canada.
NW sees second largest increase in high reward R&D spending
North West business spending on the most valuable forms of innovation has risen by the second-highest amount out of all regions of the UK. According to analysis of new Government statistics by Ryan, the tax services and software provider, expenditure on high-reward research and development (R&D) grew in the North West by 17% from £2.6bn in 2020/21 to £3bn in 2021/22. The data is captured by HMRC and is based on claims made for research and development (R&D) tax relief, which reward businesses for qualifying innovation. Alongside the increase in spending, the number of tax relief claims for R&D projects made by North West businesses rose by 3% to 9,220 claims. In total, North West businesses claimed £570m in R&D tax relief, with an average claim value of £61,822. Overall, UK-wide innovation spending that qualifies for tax relief rose 8% to £44.1bn in 2021/22. However, the number of first-time claimants has fallen for the second year running. R&D projects carried out by UK companies introduce new products and services to the marketplace, which play a critical role in economic growth as they attract investment, boost exports and lead to the creation of more skilled jobs. R&D tax relief was introduced in 2000 to encourage and reward innovation and results in either a reduction in a limited company’s corporation tax bill or a cash lump sum for companies seeking to resolve a scientific or technological uncertainty.
Scotland ‘now top performer’ in UK prime housing market
Prime house prices across the UK nudged downwards for a fourth consecutive quarter in the three months to the end of September, taking annual falls to an average of -5.2%, according to the Savills quarterly index. By contrast, Scottish prime values held steady, leaving them an average of just -1.1% down year-on-year. The latest analysis revealed that the prime city market of Glasgow has experienced the most robust growth of any Scottish location so far this year, with 0.5% growth in the nine months to September. Meanwhile, prime prices remained strong in commutable Scottish country hotspots such as Ayrshire, Stirlingshire, Fife, East Lothian, and Peeblesshire. The family house market in the £750,000 to £1.2m range within Edinburgh is also proving resilient, with an uptick in demand for contemporary homes with low energy ratings. However, even within Scotland, a two-tier trend is emerging, with prime sales above £500,000 now outperforming the more mortgage dependent mainstream market. The prime market is broadly defined by the top 5% to 10% of homes by value, which translates to above circa £500,000 in Scotland.
https://www.insider.co.uk/news/scotland-now-top-performer-uk-31081496
Digital support for North West manufacturers set to deliver £100m GVA boost benefit for region
Evaluations of digital transformation initiatives, Cheshire & Warrington 4.0 (CW4.0) and LCR 4.0 Holistic, have discovered that the projects supporting SME manufacturers will collectively contribute an additional £100m of gross value added (GVA) and 489 full-time jobs to the region’s economy. Over the last two years, the ERDF (European Regional Development Fund) initiatives, led by the University of Liverpool’s Virtual Engineering Centre (VEC), have assisted 308 SMEs and start-ups throughout the North West. SMEs working with the programmes have already created 150 full-time jobs, 90 of which are in Cheshire and Warrington’s advanced manufacturing sector. The projects have helped SME manufacturers and supply chain businesses to integrate new digital technologies into their operations. These include developing sophisticated customer service tools, gaining real-time insights into processes through data analytics, and employing visualisation tools for improved decision-making and product development. Knowledge Transfer workshops and access to world-class facilities and expertise have enabled regional businesses to develop business strategies, optimise operations, and even upskill teams for further development.