Business News Round Up (05/05/2023)
New study shows the impact of COVID-19 on the hospitality sector and beyond
The hospitality sector was undoubtedly hugely affected by the Covid-19 pandemic, but new research has now shown the knock-on effect that had on other sections of the economy. The new study from the University of Aberdeen Rowett Institute and Scotland’s Rural College (SRUC) found that the resilience of the food and drink sector is largely influenced not only by related sectors (food services and accommodation) but also by non-food sectors of the industry. Published last month (April) in Frontiers in Sustainable Food Systems, the research highlighted the knock-on effect the Covid-19 pandemic had on other connected sectors of the economy. The accommodation and food service sector – or hospitality sector – provides approximately 5 billion pounds in gross value added to the Scottish economy. In addition, it is the largest employing sector of the economy employing approximately 200,000 jobs before the COVID-19 pandemic. The COVID-19 pandemic had a significant impact on both employment/jobs and total output from the sector; a loss of 85% of output between February and May 2020, and a 23% loss in the number of jobs between March and December 2020. Sectors which were particularly impacted because of the accommodation and food services sector suffering during the pandemic, included the processed fish, fruits, vegetables, dairy, vegetable oils and soft drinks industry.
https://www.abdn.ac.uk/news/16981/
AI comes under scrutiny from UK competitions watchdog
The UK’s competitions watchdog has launched a review of artificial intelligence models following the government’s AI whitepaper published in March. The CMA is opening an initial review of competition and consumer protection considerations in the development and use of AI foundation models. These foundation models – including large language models and generative artificial intelligence which have emerged over the past five years – have the potential to transform much of what people and businesses do. Amid the popularity of Open AI’s ChatGPT tool – capable of writing impressive copy and code in response to simple commands – more and more businesses are looking to harness the power of automation. However, the increasing adoption has led to concerns over whether AI trained upon a narrow cross-section of society could lead to inherent biases – for example in the assessment of the worthiness of loan or mortgage applications – as well as the future risks it could pose to people’s privacy, human rights, and safety. The whitepaper aimed to empower existing regulators – including the CMA as well as the Health and Safety Executive, and Equality and Human Rights Commission – to come up with tailored, context-specific approaches that suit the way AI is being used in their sectors. The five principles outlined are safety, security, and robustness; transparency and explainability; fairness; accountability and governance; and contestability and redress. The latter says people need clear routes to dispute harmful outcomes or decisions generated by AI.
Scottish footfall improves – but industry body warns of false dawn
Scottish footfall increased by 7.7% in April year-on-year, which was better than the UK average increase of 5.3%. The latest Scottish Retail Consortium (SRC) and Sensormatic IQ data also showed that Scottish shopping centre footfall rose by 5.5% during April, although this was 2.9 percentage points worse than March. Footfall in Edinburgh increased by 29.4% year-on-year last month, while in Glasgow it was up by 3.3%. Compared to pre-pandemic 2019 levels, total Scottish footfall was 15.8% lower, while the levels in shopping centres was down 14.7%, footfall in Edinburgh fell by 14.7 % and in Glasgow by 13.8%. SRC director David Lonsdale said the latest figures were positive retail destinations; albeit with a slight health warning given the uplift is compared to last April when Omicron restrictions in shops and eateries had only just ended and face masks were still in force. “While there is a little sunlight for retailers in these figures, there is a risk of a false dawn. The pace of growth last month slackened and was at its weakest level since last October, while Scottish foot-traffic was almost 16% down on pre-pandemic levels, underlining the protracted nature of the challenges facing much of retail. It’s a year since the unveiling of the conclusions of the Scottish Government’s city centres recovery taskforce and its town centres action plan and what is beyond doubt is that there is still much work to do.”
https://www.insider.co.uk/news/scottish-footfall-improves-industry-body-29889550
UK companies see cooler wage growth and inflation, Bank of England survey shows
British companies’ predictions for wage growth in the coming 12 months cooled in April to their lowest level for seven months, and their expectations for inflation also eased, a Bank of England survey showed on Thursday. The BoE’s monthly Decision Maker Panel showed companies expected wage growth in the coming year of 5.6% over the three months to April – the lowest reading since the three months to September. The single month reading for April of 5.4% was the lowest since July. A separate survey from human resources data company XpertHR last week showed the median pay deal at British companies was 6% in the first quarter of 2023. BoE officials are watching gauges of wage growth closely as they judge how far to raise interest rates to prevent persistent price pressures taking hold in the economy, with annual consumer price inflation still in double-digits.