Business News Round Up (11/04/2022)
SMEs rein in fund-raising amid growing pressures
Small business recovery is stalling in Scotland, with fewer SMEs intending to raise finance than the UK average, according to new research among the clients of accountants. The survey of 3,500 SMEs reveals only 42% are actively looking to grow in the next six months, down from 50% in January. About a fifth (21%) have delayed or abandoned applying for finance in the past six months, compared with just 14% across the whole of the UK. The data has emerged in the latest edition of the Association of Chartered Certified Accountants) (ACCA UK) and Corporate Finance Network SME Tracker. Small firms in Scotland appear to be less exposed to disruption arising from the conflict in Ukraine – 8% in Scotland, against a UK figure of 17%. Nevertheless, the continued geopolitical uncertainty, ongoing Covid impact, supply chain issues and spiralling cost increases are taking their toll. Accountants cite a significant worsening of the mental health of small business clients since January, with almost a quarter (23%) now highlighting this, compared to 6% in January’s poll. A quarter of Scottish accountants indicated there had been increased interest in the R&D credit scheme from small firms over the last two years, compared with 40% across the UK.
Scottish private sector activity rises at quickest rate in nine months
The Scottish private sector registered another strong performance in March, with the fastest expansion in nine months. Royal Bank of Scotland’s Business Activity Index posted 58.4 in March, rising from 55.5 in February. Compiled by S&P Global from responses to questionnaires sent to a panel of around 500 manufacturers and service providers, the index is the sum of the percentage of ‘higher’ responses and half the percentage of ‘unchanged’ responses, with results varying between 0 and 100 – and a reading above 50 indicating an overall increase compared to the previous month, while below 50 indicating an overall decrease. The upturn was driven by a sharp increase in business activity in the service sector, as manufacturing output fell for the third time in four months. Workforce numbers across the private sector also grew, with the current sequence of job creation extending to a year. However, supply bottlenecks, material scarcity, rising energy and fuel prices and Russia’s invasion of Ukraine, all led to record increases in both input costs and output prices. Scottish private sector firms indicated a further acceleration of new business inflows in March, extending the current sequence of expansion to a year. The latest uplift in new orders was the sharpest in four months and was driven exclusively by the service sector, as new manufacturing orders fell.
https://www.insider.co.uk/news/scottish-private-sector-activity-rises-26667819
North West firms report ‘sustained rebound’ as growth supports job creation
A “sustained rebound” in activity was reported by North West businesses in March, with growth helping to support further job creation across the region, according to new figures. However, the latest Regional PMI data from NatWest signalled further evidence of rising price pressures, as companies experienced a record increase in average charges for goods and services. The headline North West 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 – registered 56.9 in March. Up from 56.7 in February, the latest reading was well above the 50.0 threshold that separates expansion from contraction and the highest since last November. NatWest said it signalled a slower rate of growth than seen across the UK as a whole (60.9), however. The first quarter ended with a further strong rise in inflows of new business at firms in the North West, with the rate of growth holding close to February’s seven-month high and continuing to far exceed the long-run average since 1997, the bank added.
https://www.business-live.co.uk/economic-development/north-west-firms-report-sustained-23631795
Restrained and hesitant SMEs risks stagnation in economy
Mounting challenges and a lacklustre Spring Statement mean small business recovery is stalling in Scotland according to the latest edition of the ACCA UK (the Association of Chartered Certified Accountants) and Corporate Finance Network (The CFN) SME Tracker. The survey, which provides feedback from accountants of about 3,500 SME clients in Scotland, reveals only 42% of Scottish SME clients are actively looking to grow in the next six months, down from 50% in January. Further, accountants report that around a fifth (21%) of Scottish SMEs have put off or abandoned applying for finance in the past six months, compared with just 14% across the whole of the UK. Small firms in Scotland appear to be less exposed to disruption arising from the conflict in Ukraine – 8% in Scotland, against a UK figure of 17%. Nevertheless, the continued geopolitical uncertainty, ongoing Covid impact, supply chain issues and spiralling cost increases are taking their toll on small firms. Accountants cite a significant worsening of the mental health of small business clients since January, with almost a quarter (23%) now highlighting this, compared to 6% in January’s poll.