Business News Round Up (05/05/2022)
Latest Fraser of Allander Scottish Business Monitor shows positivity over business volume but pressure of inflation rising
Scottish businesses have positive expectations for activity levels, employment, and turnover according to the latest Addleshaw Goddard Scottish Business Monitor report, but also report that inflationary pressure and supply chain issues pose challenges in the year ahead. The report, which surveyed 500 firms in April from across the economy, revealed that all sectors of the Scottish economy recorded large and positive net balances for their volume of business in the first quarter of 2022, with this positivity expected to continue over the next six months. Overall business sentiment remained positive, with all core indicators, except export activity, remaining optimistic. The rise in business volumes was matched in expectations for the levels of both employment and turnover in the coming six months. However, the report, produced in partnership with the University of Strathclyde’s Fraser of Allander Institute, illustrated that the growing impact of inflationary pressure and supply chain issues is expected to have a marked effect on businesses, with more than one-third expecting to reduce operations due to higher energy prices, up from one-fifth in the last three months of 2021.
Covid-19 drives investors into life sciences sector
Investor interest in healthcare technology was driven higher during the Covid-19 pandemic and made life sciences the most popular destination for equity investment in Scottish tech start-ups, according to analysis from the British Business Bank. The Bank found that investment in Scotland’s smaller life sciences companies reached £61 million during the first nine months of 2021 – 42% higher than the figure for the whole of 2020 (£43m). Equity investment into smaller businesses in the Scottish tech sector as a whole reached £163m by the end of the third quarter of 2021, 36% higher than 2020’s total of £121m. Life sciences was ahead of software, representing 37% of the total figure. Software accounted for £37m, a 23% share, during the nine months to the end of September 2021 – on track to exceed the £43m total for 2020. During the build up to Glasgow hosting the COP26 UN climate change conference last November, smaller businesses in the clean technology sector attracted £24m – up fourfold on the £6m recorded during 2020, with data from the final three months of 2021 still to be captured. The findings follow the British Business Bank’s Small Business Finance Markets report, which recently found that total equity investment in Scotland’s smaller businesses had reached £403m during the first three quarters of 2021 – exceeding the entire previous year’s £279m by 44%.
Bruntwood SciTech joins Glasgow’s tech sector in £30m investment
Manchester’s Bruntwood SciTech has unveiled a £30m scheme centred on Glasgow’s innovation district, as part of the expansion of its growing portfolio. The venture follows the science and tech specialist property provider’s acquisition of Glasgow’s Met Tower from Osborne+Co for £16.2m. This is the first investment in Scotland by the company which plans to turn the 14-storey city centre office building, which has been vacant since 2014, into a new hub for tech and digital businesses. Bruntwood SciTech is a joint venture between investor and developer Bruntwood and Legal & General. It is focused on driving the growth of the science and technology sector. Glasgow joins Bruntwood SciTech’s network of innovation districts which now spans seven locations and 11 campuses in Birmingham, Cambridge, Cheshire, Manchester, Leeds, Liverpool, and Oxford. The campuses include Alderley Park, Innovation Birmingham, Manchester Science Park, ID Manchester, Platform in Leeds, and Melbourn Science Park. The plan is to transform the Grade B-listed former City of Glasgow College building into a hub where university spin-outs, start-ups, scale-ups, and large leading tech businesses can co-locate together and benefit from being in an innovative, collaborative tech cluster.
Skills shortages and material costs hit Scottish construction activity
Construction market activity continues to rise in Scotland, despite rising material costs and ongoing skill shortages, according to the Royal Institution of Chartered Surveyors (RICS). Its first quarter UK Construction and Infrastructure Monitor found that the sector doesn’t expect to make a profit this year. A net balance of +22% of respondents in Scotland reported a rise in workloads in the quarter, up marginally from +21% in the fourth quarter of 2021. Workload growth is mainly being driven by infrastructure projects, alongside activity related to the development of public and private sector housing. The research revealed that 34% more respondents in Scotland reported a rise in infrastructure workloads than reported a fall. The net balances for private housing and public housing were +28% and +27% respectively. However, despite the growth in current workloads, the impact of global supply shortages, rising costs and a lack of skilled workers are impacting on activity. When it comes to labour, 57% of Scottish respondents said that they were experiencing a shortage of quantity surveyors, whilst 50% reported shortages in other construction professionals and 54% pointed to a lack of labourers.
https://www.insider.co.uk/news/skills-shortages-material-costs-hit-26877794