Business News Round Up (05/02/2021)
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Remote working ‘could cost UK economy up to £95bn a year’, report finds
Remote working could cost the UK economy up to £95bn a year, according to a new report analysing the benefits of office environments.Research commissioned by commercial landlord Landsec found that face-to-face working boosts productivity and innovation and sparks investment in residential and commercial property, business events, meetings, and travel. The report found that the direct economic contribution of in-person working amounts to £95bn in a typical year. Most firms pivoted to home working at the beginning of the pandemic in March last year, with some saying they will adopt a flexible approach to office use in the future. However, almost half of employees currently working at home miss camaraderie and collaboration with colleagues in the office, separate research by the property developer found. In total, 43% of workers have missed the camaraderie of being in the office during the pandemic. The survey of 3,000 office staff found that 41% of respondents believe that working in an office is better for collaboration.
Scottish deals slow to return after private equity slump
Scotland’s deal activity has been slow to recover after a slump last year in private equity activity. Mid-market transactions involving private equity investors in Scotland fell by half from 45 in 2019 to 23 and combined value was also down by half (49%), from £3.21 billion to £1.55bn. Data from KPMG shows that across the UK, the value and volume of mid-market PE deals – which covers deals valued at between £10m and £300m – plummeted by a third on the previous year. In total, 452 mid-market transactions completed during the year, with a combined value of £28.45bn. However, while total annual deal volumes were ultimately hampered by the cliff-fall seen in the second quarter, there was a clear bounce-back in activity in Q3 and Q4. Deals that had been put on hold sprung back to life, and PE investors, still sitting on substantial reserves of capital, mobilised once more, resulting in over two hundred transactions completing in each of the final two quarters.
Pandemic leads to 41% drop in volume of North West mid-market private equity deals
The number of mid-market private equity deals completed in the North West fell by more 41% in 2020 as COVID-19 closed vast sections of the economy for prolonged periods, according to KPMG’s latest study of UK transactions involving private equity investors. The study, which covers the broader private equity market with a particular focus on the mid-market segment, reports that 54 deals completed in the region over the course of 2020, with a combined value of £3.4bn, down 42% from the £5.8bn recorded in 2019. The North West is home to in excess of 25 private equity houses, more than any other UK region except London, with deals done still making up 12% of the UK’s completed deals in 2020, despite the drop. In terms of the trend over the course of the year, deal activity started strongly in 2020, with 20 deals completed in the first quarter. The second quarter witnessed a sharp – if anticipated – decline as the pandemic shuttered the economy with just nine deals completed.
Permanent job figures rose in January for the first time in a year
Permanent job appointments in Scotland rose for the first time in a year, while temp billing increased for the fifth straight month, according to the latest Royal Bank of Scotland Report on Jobs. Figures for January shown the growth was only mild but were nonetheless a stark contrast to the unprecedented downturns seen last spring. Meanwhile, candidate availability rose further, with panellists attributing the latest upturn to redundancies, although the rates of increase slowed noticeably on the month. Upwards pay pressures persisted into the new year, as highlighted by further rises in starting pay. That said, both salaries and temp wages increased at softer rates compared to December. The rise in permanent staff appointments in January ended an 11-month sequence of decline. Firms, particularly in the IT and computing, had resumed hiring efforts amid improved market conditions, according to survey respondents. Nonetheless, trends between Scotland and the UK diverged during January, as a renewed downturn in placements was recorded at the national level.
https://www.insider.co.uk/news/permanent-job-figures-rose-january-23446533