Business News Round Up (04/03/2021)
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SMEs welcome furlough extension as nearly 600,000 businesses at risk of closure
Following the Government’s announcement that the UK Job Retention Scheme is to be extended to the end of September, new research has revealed that more than one in 10 (12%) SMEs would have been at risk of closure had the scheme ended in April. The survey, which was commissioned by Hitachi Capital Invoice Finance, spoke to more than 1,000 senior business decision makers at SMEs across the UK from a range of different industries about how the end of the furlough scheme would have impacted their business. On top of a tenth admitting they would be at risk of closure, 14% of business decision makers agreed they would have needed to make redundancies had the scheme not been extended, with workers in the hospitality and leisure (29%) and manufacturing (20%) industries being most at risk. When looking at the industries most at risk of closure, hospitality and leisure were again at the top of the list, with more than a quarter (28%) admitting they could have closed down without additional furlough support.
Growing confidence helps bolster UK services sector
The slowdown in the UK services sector eased last month, a closely-watched industry survey showed on Wednesday, as optimism continued to build on the back of the vaccine rollout programme. The seasonally-adjusted IHS Markit/CIPS UK services PMI business activity index was 49.5 in February, up sharply on January’s 39.5, although it undershot the flash estimate and consensus for 49.7. The index has posted below the neutral 50.0 level since November 2020, but February’s reading indicates the slowest decline in output since then. A reading below 50.0 indicates contraction, while one above it indicates growth. The composite PMI, a weighted average of comparable manufacturing and services indices, was 49.6, compared to 41.2 in January. That was also a revision of the flash estimate – for 49.8 – and marginally below consensus.
Report sheds light on ‘cataclysmic year’ for Scotland’s finance sector
The impact of Covid-19, Brexit and the climate crisis are accelerating changes to the make-up of Scotland’s financial sector, according to Core-Asset Consulting’s latest report. It comes as the recruiter posts a 28% fall in new vacancies during 2020, along with a 10% drop in new candidates – suggesting constrained opportunities and reduced movement in the jobs market. Betsy Williamson, the founder and managing director of Core-Asset, said: “The last 12 months have changed the face of the sector forever – we’ve seen social and economic changes take place at a velocity unlike anything previously experienced. For instance, we’re on a knife-edge when it comes to gender diversity and equality of opportunities – women in senior roles could be hit hardest, as they’ve worked so hard to get to those roles, but many are now carrying lots of extra responsibilities.” Williamson said this should be taken as a warning, with companies potentially finding themselves on the brink of inadvertently pushing out waves of women if they do not acknowledge cultural barriers online and accommodate the challenges faced by working parents.
https://www.insider.co.uk/news/report-sheds-light-cataclysmic-year-23604374
Brexit disruption to shave 0.5% off GDP as UK starts its recovery
Post-Brexit disruption to UK-EU trade will reduce the UK’s first quarter GDP growth by 0.5%, according to the government’s budgetary watchdog.The Office for Budget Responsibility (OBR) said in its forecast today that customs disruptions at the EU border and a drop in the number of lorries travelling between the UK and EU meant Brexit is having a larger effect on economic growth than previously expected. The forecast predicted UK GDP growth of 4% this year and over 7% next year as the UK drops Covid restrictions. However, OBR data shows that Heavy Goods Vehicle (HGV) traffic around Dover was 10 to 15% lower in the second half of January than one year earlier.