Business News Round Up (03/08/2023)
Scottish construction activity falls again as industry hit by rising costs and ongoing labour shortages
Activity in the Scottish construction sector has fallen for the third consecutive quarter as the industry continues to suffer from cost rises and labour shortages. The Royal Institution of Chartered Surveyors (RICS) Construction Monitor for Q2 in Scotland showed all subsectors were seeing falling or flat activity levels. RICS said a net balance of -4% of Scottish respondents said workloads fell in Q2, compared to the UK average of +13% of respondents. In terms of subsectors, private housing and private industrial works were reported to be in negative territory (-8% and -13% respectively). Public housing, private commercial and infrastructure workloads were flat through Q2. Labour shortages were less severe than in the first quarter. Some 56% of surveyors reported a shortage in quantity surveyors, down from 63% in Q1. Surveyors were less optimistic about the 12 months ahead than they were and expected workloads to be broadly flat over the year ahead. Meanwhile labour shortages and material cost pressures are also weighing on profit margin expectations over the next year with surveyors expecting margins to be squeezed. A net balance of -15% of surveyors expect profit margins to decline over the next year.
https://www.insider.co.uk/news/scottish-construction-activity-falls-again-30615157
Improved rural connectivity could add £65bn to UK economy
Despite digital connectivity improving across the UK, creating new opportunities within previously disconnected regions, a stubborn digital divide remains between rural and urban locations, preventing communities and economies from achieving their growth potential, with many areas still unable to access reliable connectivity. A study from the Centre for Economics and Business Research (Cebr) and Virgin Media O2 has put a figure of £65.1bn on what improved rural connectivity could boost the UK economy by. Superfast business broadband coverage is currently available for 95% of urban areas in England. Yet according to the latest Connected Nations report from UK communications regulator Ofcom, the gap between average urban and rural speeds has widened, following a sustained period during which it narrowed. Ofcom discovered that during the 8-10pm peak-time period at the end of 2022, there was a 58% difference between average urban (62.1Mbps) and rural (39.4Mbps) download speeds, up from 42% in 2021. While rural speeds increased, the rate of increase was lower than in urban areas, where growth in the availability and take-up of faster cable and full-fibre services is higher. The Cebr and Virgin Media O2 study, titled The great rural revival, was conducted by Opinium and asked 1,096 respondents with a decision-making role on tasks related to digital connectivity, addressing four sectors central to the UK’s rural economy – tourism, agriculture, manufacturing and small businesses. The survey consisted of both quantitative questions to help generate the data required to model the impacts of improved digital connectivity, and qualitative questions to provide further insight into the challenges faced by rural businesses.
UK services growth cools to six-month low in July: PMI
Growth across British services companies slowed last month to its lowest level since January, a business survey confirmed on Thursday ahead of the Bank of England’s interest rate decision. The final reading of the UK S&P Global Services Purchasing Managers’ Index (PMI) fell in July to 51.5 from 53.7 in June, unchanged from a preliminary “flash” reading. Readings above 50 denote growth. The survey mirrored other gauges of the economy that point to a stagnating economy, held back by high inflation and rising borrowing costs, although it has so far dodged a recession that many economists predicted late last year. The BoE closely watches the PMI. Although businesses said costs and selling prices fell in July, S&P Global noted higher salary payments were a continued source of upward pressure – something the central bank’s officials are likely to note. Economists polled by Reuters expect the BoE will raise interest rates later on Thursday to a new 15-year high of 5.25%, up from 5% now. “The loss of momentum signalled by service providers in July suggests that the UK economy is set to flatline at best in the coming months as higher borrowing costs take a bigger toll on consumer spending and business confidence,” S&P Global economics director Tim Moore said.
https://www.reuters.com/world/uk/uk-services-growth-cools-six-month-low-july-pmi-2023-08-03/
Manufacturers graduate with new digital skills
A generation of manufacturing leaders is now armed with new digital skills and tools after graduating from a trailblazing North West programme. Fifteen delegates completed the ‘Leading Digital Transformation’ programme, designed by Made Smarter, the government-funded industry-led initiative to increase technology adoption among SME manufacturers, and Manchester Metropolitan University (MMU). Delivered through a blend of face-to-face workshops, online webinars, case studies to see technology in action, and a site visit to PrintCity, MMU’s 3D additive and digital manufacturing centre, the funded programme empowers participants to create a bespoke digitalisation strategy for their business. It also provides them with a set of practical tools to make the most of opportunities that digital transformation can offer, and access further support from Made Smarter, including funding for new technology and specialist advisers. Companies who recently completed the three-month fast-track programme include: FRC Group; Ajax Equipment; Harten Frameworks; Greer Manufacturing; Logs Direct; BEP Surface Technologies; AV Metals; Rapid 3D Solutions; Playdale Playgrounds; Slater Harrison; Beverston Engineering; Liversidge Windows; CNC Robotics; and Arden Dies. Over the past four years 75 digital leaders have been supported through the inaugural Made Smarter leadership programme and more recently, Leading Digital Transformation, which is now recruiting for its next cohort of businesses.