Business News Round Up (05/05/2020)
UK manufacturing sector books record drops in ‘ruinous’ April
Activity in the UK manufacturing sector fell to a record low in April as supply chains experienced significant disruption and new orders and employment contracted at its fastest rate in 28 years, new figures show. The IHS Markit’s Purchasing Managers Index (PMI) revealed factory output fell to 32.6 in April, down from 47.8 in March. UK manufacturing firms blamed the coronavirus lockdown for their steepest falls on record. Company closures, weak demand in the UK and overseas, and widespread furloughing of staff all hurt them, with the only increase in demand being recorded by manufacturing companies producing food products and medical supplies.
https://www.cityam.com/coronavirus-uk-manufacturing-sector-books-record-drops-in-ruinous-april/
More than half a million UK businesses face high risk of insolvency
One in 10 British businesses believe they face a “high risk” of going bust due to the coronavirus pandemic, according to a survey. Around half of businesses questioned said they also believe there is a “small risk” they will become insolvent as vast swathes of the economy remain closed. The Opinium-CEBR Business Distress Tracker said the data from 500 firms equates to more than half a million businesses which could be pushed under by the lockdown. A further 250,000 businesses said they would not be able to survive if trading conditions remain as they are for another month and another 1.1 million said they would go bust in three months under current circumstances. For those companies with one eye on recovery, bosses said they will need at least six months to return to pre-crisis production levels and one in six said it could take a year to return fully.
https://www.insider.co.uk/news/more-half-million-uk-businesses-21974703
Scottish Enterprise suspends fund after it is swamped with applications
Scottish Enterprise, Scotland’s business advice, support, and funding agency, has suspended a new fund to help businesses after experiencing high volumes of applications. The agency announced this evening that from 5pm on May 5th the Pivotal Enterprise Resilience Fund will shut for one week to allow detailed assessment of initial applications. Scottish Enterprise is working with partner agencies, including Highlands & Islands Enterprise, South of Scotland Enterprise, VisitScotland and Creative Scotland, to ensure the funds are provided to the most relevant companies as per the application criteria.
https://www.insider.co.uk/news/scottish-enterprise-suspends-fund-after-21975006
A quarter of UK employees furloughed, and companies claiming £8 billion to pay wages
Nearly a quarter of employees in the UK have been furloughed, with companies claiming £8 billion from the government to sustain their wage bills during the lockdown, according to new data from HM Revenue and Customs (HMRC). HMRC revealed that 6.3 million workers from 800,000 employers had been furloughed, accounting for 23% of the UK’s private sector workers. Under the plan, workers who are furloughed have 80% of their wages paid by the government up to a ceiling of £2,500 per month. At present, wage subsidies are to remain in place until the end of June, although there is already pressure from employers for the scheme to be extended.