Business News Round Up (09/10/2023)
Fresh fall in private sector activity and further downturn in new business, according to latest Royal Bank PMI
The latest Royal Bank of Scotland PMI® survey signalled a fresh fall in output across Scotland’s private sector during September, as the ongoing weakness in manufacturing production extended to services activity which fell for the first time in eight months. The headline Scotland Business Activity Index moved below the 50.0 no-change threshold separating growth from contraction for the first time since January. That said, at 49.3 in September, down from 50.0 in August, the latest reading signalled only a marginal reduction in business activity and was weaker than that seen across the UK as a whole (48.5). The downturn across Scotland reflected weakening demand conditions. Inflows of new work fell for the third consecutive month in September. Firms noted that general uncertainty shrouding the economic outlook and increased borrowing costs and inflationary pressures had squeezed disposable incomes, discouraging customer activity. Scotland’s private sector recorded a further reduction in inflows of new work during September. According to anecdotal evidence, uncertainty surrounding the UK economic outlook and increased cost of living and borrowing costs weighed on customer demand. That said, the rate of decrease eased from August, with both sectors recording softer downturns.
Activity growth strengthens amid uptick in new business
The headline NatWest London PMI Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – strengthened to a three-month high of 52.4 in September, from 50.4 in August, to signal a moderate expansion of private sector activity. The improvement came amid a renewed increase in new orders and was the only upturn out of the 12 monitored UK regions. Private sector firms based in the capital registered an increase in new work intakes at the end of the third quarter. The overall uplift was only marginal but followed the first month-on-month decrease in 2023 so far in August. Some companies commented on new client wins, whereas others reported weak demand conditions. The renewed expansion in new business contrasted with a third straight decline at the national level in September, albeit one that was softer compared to the previous month. The Future Output Index recorded only a fractional drop in September and continued to signal a solid degree of confidence among London businesses. Just over half of all survey participants forecasted an increase in output for the next 12 months, compared to 14% which predicted a decline. While some firms held concerns about inflation, interest rates and consumer confidence, many were hopeful about the economic outlook and investment strategies.
https://londonlovesbusiness.com/activity-growth-strengthens-amid-uptick-in-new-business/
Offshore wind supply chain could boost UK economy by £92 billion before 2040
Growing the UK’s supply chain for offshore wind represents a GBP 92 billion (approximately EUR 106 billion) opportunity to boost the UK’s economy by 2040, according to a report by the Offshore Wind Industry Council (OWIC) and the Offshore Wind Growth Partnership (OWGP). The report, titled “Supply Chain Capability Analysis”, outlines key measures that industry and government can take to strengthen the UK’s offshore wind supply chain, according to OWIC. The UK has the world’s second-largest installed offshore wind capacity, with a government target to more than triple this capacity by 2030 to 50 GW, including 5 GW of floating offshore wind. The expansion represents a significant increase in demand for equipment and services required to develop, construct, and operate offshore wind farms. Meanwhile, the expansion of offshore wind in other countries allows the UK to export its equipment, services, and expertise abroad, OWIC said. “The UK is one of the world leaders in offshore wind in terms of installed capacity, contributing to lower energy bills, extra money for the public purse, and new jobs being created in coastal towns and cities,” said Tim Pick, Chair of the Offshore Wind Growth Partnership, and the UK’s former Offshore Wind Champion. “However, we’re only really scratching the surface when it comes to the full potential economic and social benefit of offshore wind, which we can only capture by maturing our domestic supply chain.”
Manufacturers urge Hunt to axe autumn statement
Manufacturers want Chancellor Jeremy Hunt to scrap the autumn statement which they regard as a disruption to planning and a deterrent to investment. Make UK, the self-styled “voice of UK manufacturing”, wants a return to a single annual fiscal statement in the spring to avoid the changes in policy in November. Fhaheen Khan, senior economist at Make UK, said the tax and regulatory system is not fit for purpose and is failing to promote vital investment in skills, capital, and green growth. “This is not helped by the fact we have two fiscal statements a year, which hampers businesses’ investment planning,” said Khan. “We cannot continue with the flip-flopping and policy inconsistency if we are to shake the economy out of its torpor and promote long-term growth.” Mr Hunt is due to deliver this year’s autumn statement on 22 November, a tradition stretching back to the 1970s. He is under pressure to tackle sluggish productivity and high levels of tax but has said that cutting tax will be difficult as the battle to control inflation takes priority. Make UK, which represents 20,000 companies, said the biggest concern among manufacturers is about regular changes to investment incentives.
https://dailybusinessgroup.co.uk/2023/10/manufacturers-urge-hunt-to-axe-autumn-statement/