Business News Round Up (06/09/2022)
UK manufacturing sector hit by 1,400 insolvencies
As the UK’s economy continues to flounder in the wake of historic inflation, and spiralling energy prices, insolvencies in the UK manufacturing sector have jumped by more than 60% in the last year. A new study suggests that producers of furniture and food products have been hardest hit – accounting for 200 insolvencies in the last 12 months. Manufacturing is one of the production industries, which also include mining, electricity, water and waste management and oil and gas extraction. According to a Parliamentary research briefing from the House of Commons Library, in 2021, the manufacturing sector accounted for 9.7% of total UK economic output, and 7.3% of jobs – making its health a key economic bellwether. The downturn faced by large swathes of manufacturers will be a grave cause for concern, among many experts, then. Record inflation in the UK – exacerbated by the Russian military’s invasion of Ukraine – has driven up the price of procuring materials and energy – while stagnant wages mean that demand for consumables has collapsed. As a result, a growing number of manufacturing firms are finding themselves in financial distress, according to new research.
https://www.consultancy.uk/news/32227/uk-manufacturing-sector-hit-by-1400-insolvencies
Tech sector property investor plans ‘digital cluster’ around iconic Met Tower in Glasgow
A technology sector-focused property developer is investing in new building space to house a ‘digital cluster’ around the iconic Met Tower in Glasgow. Bruntwood SciTech, a joint venture between investor and developer Bruntwood and Legal & General, is doubling its investment in the city to £60m, with new offices adjacent to the tower. The announcement comes three months after acquiring and announcing the redevelopment of their first hub in Scotland, at Met Tower in the heart of the city’s innovation district. The proposals include the development of a new workspace of more than 100,000 sq ft adjacent to the Grade B listed building – adding a further £30m of investment to the ‘new city centre tech and digital cluster’. Pete Crowther, property director at Bruntwood SciTech, said: “The Scottish digital and tech sector is experiencing rapid growth and this £60m investment into Glasgow is testament to our long-term commitment. There is a real opportunity here to not only create a new tech cluster at Met Tower and in our new building but also support local businesses and communities across the West of Scotland. Above the physical spaces we are introducing, we’re also committed to creating opportunities for businesses across the UK so they can collaborate and innovate as the sector continues to thrive. We’re looking forward to sharing the plans for the new development in more detail and continuing to strengthen our network across Scotland.”
UK payments upgrade to add more than £3bn to GSP, but much more on offer
The UK upgrade to its payments infrastructure is expected to add more than £3bn to GDP by 2026, but the potential of real-time payments is much bigger. According to a study from the Centre for Economics and Business Research (Cebr), software firm ACI Worldwide, and Global Data, if theoretically all payments were real-time, UK GDP could be up by £85bn by 2026. A five-year programme led by retail payments authority Pay.uk, known as the UK’s New Payments Architecture programme, is modernising the UK’s legacy payment infrastructure, promising more choice in terms of payments options over more traditional payment types such as cards. This includes the increasing availability of real-time payments. According to the report, real-time payments will add £3.3bn to the UK’s GDP by 2026. These payments add more liquidity to economies and generate more economic activity. However, it added that “untapped potential” is far bigger. Owen Good, head of economic advisory at the Centre for Economics and Business Research, said: “By enabling money to transfer between parties within seconds rather than days, real-time payments can significantly improve overall market efficiencies in the UK economy and play an important role in helping facilitate growth.”
Investor hails innovations coming out of North’s Universities
The “breadth and depth of science” being undertaken in the North of England has been hailed by the chief executive of Northern Gritstone, a recently established investor focused on university spinouts. Northern Gritstone was launched in July 2021 by the Universities of Leeds, Manchester, and Sheffield. It has a focus on investing in university spinouts and start-ups in the North of England, with a philosophy of ‘profit with purpose. In May, it announced its first close of £215m after its initial fundraising attracted investors encompassing local authority pension funds, high net worth individuals and institutional investors. The company has since announced initial investments in life sciences company, Imperagen, immersion cooling technology producer Iceotope and biological engineering firm Opteran. Duncan Johnson, chief executive at Northern Gritstone, said the North is a “hotbed of innovation”. “In the past, the North of England has failed to attract venture capital funding for innovation businesses,” he told Insider. “Research has shown that only 1.8 per cent of funding goes to the North, with 90 per cent to Oxford, Cambridge and London. However, the Northern universities together are vastly stronger. Universities want to commercialise their IP but need money to do it. About three years ago, Leeds, Manchester and Sheffield decided to look at what Oxford had done in creating a venture capital initiative. That was the genesis of Northern Gritstone. It’s built around a framework agreement that gives us first refusal to invest in innovations coming out of the universities.”