Business News Round Up (04/06/2021)
Survey highlights business’ struggles following third lockdown and impact of Brexit
MORE than half of owner-managed businesses in Scotland say uncertain trading conditions pose the biggest single challenge coming out of the third lockdown – with 18 % still in survival mode. Recent research by the Association of Practising Accountants (APA) found that many businesses are still struggling with the impact of Covid-19 and the uncertain economic outlook, coupled with the challenges posed by Brexit. A worrying 16% of the businesses across Scotland, surveyed between April and May, reported that it is likely they will have to make redundancies in the next three to six months. Meanwhile, 32% reported a negative or very negative impact on their business since the UK left the EU and 15% cited Brexit supply chain issues as their biggest challenge. It is however pleasing to see that 79% of businesses are either confident or somewhat confident they would be able to access the finance they need over the next six months, with anecdotal evidence suggesting the major banks were continuing to lend.
2020 named year of the start-up as a record 770,000 UK businesses were created
UK entrepreneurs fought back against the trials and tribulations of the pandemic last year, creating 770,000 new businesses throughout 2020, an all-time UK record. Data compiled by digital payment provider Tyl by NatWest, has revealed that the number of start-up businesses grew by 30% compared to 2019, and aside from April, 50,000 new businesses were created every month in 2020. In a year of lockdown restrictions which resulted in mass closures across the high street, new entrepreneurs turned to the digital market to set up shop. This change in approach made online and mail order businesses the most popular sector of creation in 2020.
Scottish GDP ‘back to pre-Covid level by next year
Scotland’s economy is expected to return to its pre-Covid level early next year, according to new data. KPMG has revised its 2021 forecast for Scotland’s GDP from 5.5% to 6.4%, supported by investment by manufacturers and by oil and gas businesses experiencing an increase in global demand and rising oil prices. Growth projections for 2022 have been revised slightly downwards from 5.8% to 5.2%, but once Scotland regains its pre-pandemic level of output in early-2022, services firms are expected to underpin more consistent growth. KPMG predicts Scottish financial and business services firms will be the main contributor to national GDP growth in long term, with the relative lesser impact of Brexit on Scotland’s financial services sector compared to London an important factor.
Footfall recovery gathers pace, but still a quarter below pre-pandemic levels
Scottish retail footfall fell by 24.7% in May, although this was a 27.4% increase from April and above the UK average decline. The latest Scottish Retail Consortium (SRC) and Sensormatic IQ data showed that shopping centre footfall declined by 33% in May, up from a 59% fall in April. Footfall in Glasgow decreased by 23.1%, although again, this was a 28.7% improvement from April. All 2021 figures are compared with pre-pandemic 2019. SRC director David Lonsdale said that the recovery in footfall gathered momentum in the first full month that shops were able to open since Scotland’s lockdown was lifted in late April. “That said, visits to retail destinations still languished a quarter lower than during the comparable period two years ago. Reopening alone has yet to prove a magic bullet for our hard-pressed retail industry, the country’s largest private sector employer, which remains unable to trade at capacity due to physical distancing and caps on the number of customers in stores.”
https://www.insider.co.uk/news/footfall-recovery-gathers-pace-still-24242523