Business News Round Up (06/12/2021)
20,000 small businesses lost in first year of Covid
Finance Secretary Kate Forbes has been urged to provide continued support after new data showed Scotland lost almost 20,000 small businesses in the first 12 months of the Covid crisis. The number of registered firms between March 2020 and March 2021 fell by 19,805, a drop of 5.4%. There are now 344,505 enterprises in Scotland, the smallest number since 2014 when there were 329,765 businesses. Most of the fall are not registered for VAT and/or PAYE – accounting for 19,015 of the total. The Federation of Small Businesses said that this trend implies that the crisis has been particularly difficult for the self-employed and new start businesses. Andrew McRae, FSB’s Scotland policy chairman, said: “The stories behind these figures will all be different. But they’ll include the tour guide who had to get a job as he couldn’t run the business he loved while there were no tourists. Or the migrant business owner who decided to return to their country of origin during the crisis and then never came back. And the person who ran the local café but couldn’t make it turn a profit when faced with restrictions. While the public health measures that were taken were necessary, there’s no doubt that they took a huge toll on local firms and the self-employed. That’s why we believe that policymakers have a duty to help these operators recover from the crisis.”
CBI cuts UK economic growth forecasts on supply chain hit
Britain’s economy looks set to grow more slowly than previously thought this year and in 2023 due to global supply chain problems and the government must encourage longer-term business investment, an employers group said on Monday. The Confederation of British Industry cut its forecasts for economic growth to 6.9% in 2021 and 5.1% in 2022 from previous estimates of 8.2% and 6.1%. It said the downgrade mostly reflected weaker growth since its last forecasts in June and the supply chain problems that have slowed the recovery from last year’s coronavirus slump were likely to end in mid-2022. With exports still weak, household spending would drive 90% of growth next year and two-thirds of it in 2023 thanks to a strong jobs market and savings racked up during the pandemic. Business investment looked set to grow by 8.2% next year and go above its pre-pandemic level but the bounce would probably prove short-lived with corporate investment falling back in mid-2023 when a tax incentive is due to expire.
Further Covid-19 restrictions could hamper the UK’s recovery – KPMG
UK Gross Domestic Product (GDP) is predicted to grow between 1.8% and 4.2% next year, according to the latest analysis from KPMG. The professional services firm warned that the emergence of a potentially more contagious strain of coronavirus brings new uncertainties around the short-term economic outlook, while growth momentum is expected to decelerate until a booster is rolled out to halt the rise in cases. The full impact of the new variant will depend on the rise in the number of acute Covid-19 cases and any social distancing restrictions that are introduced, the report stated. KPMG has developed three scenarios based on assumptions around the severity of the new strain and the way the UK and Scottish governments respond in order to contain it. The variation in GDP forecasts for next year are dependent on the extent social distancing restrictions are introduced in the first half of the year. Current measures to control the pandemic with minimal restrictions could see a relatively small impact on economic growth, as depicted in the upside scenario. KPMG found that labour shortages have become a significant impediment to growth and pressures on pay. The labour market appears to have weathered the end of the furlough scheme, with the unemployment rate expected to peak at 4.5% in its upside scenario, while new restrictions to combat the Omicron variant could see unemployment peak at 5% to 5.7% in 2022.
https://www.insider.co.uk/news/further-covid-19-restrictions-could-25610235
UK firms to go on ‘ESG hiring spree’ in 2022
There were a record number of job vacancies in the UK this year centred around environment, social and governance (ESG) – with more anticipated in 2022 according to global recruiter Robert Walters. There have been more than 35,000 new jobs created this year alone around ESG – with the number of people moving into these roles increasing by +7% to now represent upwards of 400,000 professionals in the UK. The heightened focus on ESG comes as the UK presses ahead with its world-leading commitment to reduce its greenhouse-gas emissions to net zero by 2050, in addition to mounting pressure on listed companies to be more transparent around pay and representation at board level. Added to this the Financial Conduct Authority (FCA) recently announced their work with Government to improve transparency and data discrepancy, in a bid to put UK financial services and regulation at the forefront of ESG internationally.