Business News Round Up (05/09/2023)
Scottish economy expected to return to calendar year growth in 2024, says EY Scottish ITEM Club Forecast
While 2023 is expected to play host to continued challenging conditions, the Scottish economy should see a return to calendar year growth in 2024 with Gross Value Added (GVA) rising by 1.6%, helped by a 2.3% increase in consumer spending, as employment and real wages recover. This is according to the latest EY ITEM Club’s Scotland Forecast. Scottish GVA is anticipated to fall by 0.6% in 2023, with decline largely concentrated in the first half of the year. Some sectors can expect to see growth, led by health and social care (1.2%), education administrative and support services (1.1%), and public administration (0.8%) (page 22). Marginal rises are also forecast in professional, scientific, and technical sector (0.3%), as well as in construction (0.1%). Scotland’s economy grew strongly in 2021 as it recovered from the pandemic, before slowing in the second half of last year. The EY ITEM Club estimates that Scotland’s GVA rose 5.3% in 2022, a slowdown from 7.9% in 2021, with 2022’s growth concentrated in the year’s first half. This pattern broadly mirrored the experience of the UK – and of much of the world – and reflected the impact on the global economy caused by the war in Ukraine and its consequences for confidence, supply chains, and energy prices and inflation.
https://www.ey.com/en_uk/news/2023/03/scottish-economy-expected-to-return-to-growth-in-2024
North West mid-sized firms growing faster than FTSE
Despite economic challenges, the North West’s mid-market has grown revenues and profits in the last year, according to new research from accountancy and business advisory firm, BDO. Mid-sized businesses in the North West reported 11% growth in revenues in the last year. Total revenues generated by these businesses reached £136bn and they have created more than 773,000 jobs. In comparison, London’s mid-sized businesses recorded the most significant turnover growth of 17%, outperforming all other UK regions. Businesses with revenues between £10m and £300m, AIM listed, and private equity owned, what BDO calls the economic engine, grew overall turnover by 12% in the last year, to £1.5tn. This compares to overall turnover growth of 10% for FTSE 350 businesses and a reduction of more than a third (36%) in turnover for smaller businesses, defined as those with less than £10m in revenues. Mid-sized businesses also demonstrated resilience in employment levels, reporting a national increase in jobs of 1% in the last year. This brings the total number of employees to eight million, accounting for one in four UK jobs. However, North West businesses saw a 1.5% drop in job creation in the past year despite an overall 27% growth in job figures over a five-year period. In the past year, FTSE 350 businesses saw the total number of employees fall slightly by 1%, to five million. Smaller businesses recorded a reduction of 15% with the number of employees dropping to two million.
CBI Scotland urges Scots Gov to adopt ‘whole system’ Net Zero economy approach
CBI Scotland, the trade organisation which represents Scottish businesses, has called for the Scottish Government to adopt a “whole system” approach to deliver a “productive, innovative, and sustainable” net zero economy.The call comes ahead of tomorrow’s 2023/24 Programme for Government announcement, detailing how Scots Gov aims to “deliver a wellbeing economy that boosts economic growth.” CBI Scotland’s businesses have identified infrastructure decarbonisation, building new homes, improved broadband and transport connectivity, the labour market, productivity, and a competitive business environment as the key areas for economic performance gains in Scotland. The group said that the devolved government must utilise Scotland’s energy strengths, as well as take account of UK Government incentives and regulations to drive energy efficiency improvements. This includes the development of a clean heat market mechanism, and the Great British Insulation Scheme, which aims to upgrade inefficient homes. Regarding tax, CBI Scotland suggests that the Scottish Government should unlock trapped tax investment, including boosting exports and creating a long-term competitive tax strategy as to cut the costs of doing business and drive inward investment. This includes lowering business rates, thereby providing Scotland a level playing field with England on the large business supplement.
https://www.digit.fyi/cbi-scotland-scots-gov-must-adopt-whole-system-approach-to-net-zero-economy/
Manchester dominates CBRE’s ranking of UK growth cities
Claiming a spot as a top five city for growth in nearly all of the consultancy’s sector studies – including top marks for half – Manchester reaffirmed its status as a hotspot for development and investment. CBRE’s Which City? Which Sector? report, released Monday, looked at 50 of the country’s largest regional towns and cities outside of London to evaluate which was best suited for growth in the housing, office, retail, life sciences, and industrial scene. To craft its listing, CBRE looked at a variety of factors including GDP, employment growth, demographic trends, property supply pipeline, housing affordability, and local universities. It is safe to say that if CBRE’s predictions are accurate, Manchester is ripe for investment securing top spots on the consultancy’s ranking for growth cities in the office, urban logistics, student accommodation, self-storage, single-family housing, and multi-family housing. Much of that is due to its projected population growth – with CBRE estimating the number of people living in Manchester could increase by nearly 6% within the next decade. More people means more money, with CBRE putting the city’s growth in consumer spending within the decade at 24.7%.