Business News Round Up (04/03/2024)
NW small business equity investment activity drops
Research by the British Business Bank has highlighted a sustained drop in small business equity investment across the North West, following a nationwide slowdown. According to the bank’s Small Business Finance Markets 2023/24 report, the region experienced another decline in small business equity investment in Q1-Q3 2023, with the number of equity deals in the region declining by 27 per cent to 88, compared to the previous year. Value of investment also saw a considerable drop, declining by 67% to £175.3m over the same period. The region had also seen a decline in equity activity between 2021 and 2022.However, this comes at a time when the investment gap between London and the rest of the UK is closing. In Q1-Q3 2023, the capital accounted for 46 per cent of all equity deals, a four percentage points drop from the same period in 2022.
Scottish employment gap set to widen compared to rest of UK
While economic momentum and employment growth will gradually build throughout the UK over the next three years, Scotland’s labour market is expected to continue to see challenges and lag other regions. The latest EY Regional Economic Forecast predicted that the average employment growth rate in Scotland between 2024 and 2027 could be 0.8%, lagging all other regions across the UK, with Northern Ireland and Wales sitting at a close second at 0.9%. All three are predicted to be behind the UK national average of 1.1%. Scotland’s employment prospects are dampened by weak demographic growth, a high rate of economic inactivity (19.6% for 2023) and tighter fiscal policy. The Annual Population Survey, published in the latest Scottish EY ITEM Club Forecast, showed that long-term sickness appears to be a considerable reason for economic inactivity in Scotland, accounting for almost 32% of inactivity, compared to 27% in the UK.
https://www.insider.co.uk/news/scottish-employment-gap-set-widen-32250423
Manchester ‘set to outpace UK economic growth’ until 2027, new EY report finds
Manchester is set to outpace UK economic growth until 2027, a new report has predicted. EY’s latest Regional Economic Forecast shows Manchester is set to see average annual growth in Gross Value Added of 2.2% between 2024 and 2027 – comfortably above the national average of 1.9%. The city is also expected to have the second-fastest employment growth of all UK towns and cities over the period. But the North West as a whole is predicted to see slower than average growth. The region’s GVA growth is forecast to average 1.7% from 2024 – 2027, with average employment growth of 1%, just below the national average of 1.1%. Liverpool’s economy is expected to see 1.8% annual average growth from 2024 – 2027, slightly ahead of the regional average. The city is also predicted to see employment grow by 1.2% a year over the period, above both the national and North West averages.
https://www.business-live.co.uk/economic-development/manchester-set-outpace-uk-economic-28747578
Equity investment in smaller Scots businesses remain resilient
Intermediaries see awareness of and access to finance as the biggest obstacles to demand, despite high interest rates. Equity investment in Scotland’s smaller businesses nearly halved last year but was still ahead of the UK average and on track to record the third highest annual figure in the last decade, according to new research from the British Business Bank. The Small Business Finance Markets 2023/24 report found that by the end of Q3 2023, the total value of equity investment in smaller firms in Scotland had reached £295million. While this was down on £562million during 2022 and 2021’s £417 million, it was well ahead of the ten-year average of £236million. During the first nine months of 2023 there were 118 equity deals, below the ten-year average of 134. However, the average deal size was the second highest of the previous decade at £2.5million, behind only 2022’s £3.6million.
https://www.digit.fyi/equity-investment-in-smaller-scots-businesses-remain-resilient/