Business News Round Up (11/05/2020)
Scotland’s private sector activity sees largest drop in record
Scottish businesses experienced an unparalleled downturn in activity in April, according to a new survey. The Royal Bank of Scotland Purchasing Managers Index shows that service output fell from 29.7 in March to a new low of 10.7 in April, with the service sector recording a faster decline than manufacturing, although both sectors saw the most marked reductions in activity on record as the full impact of lockdown measures was seen. It signalled the most substantial contraction in private sector activity in the 22-year survey history. For the first time since January 1999, private sector firms in Scotland highlighted a reduction in input prices during April.
https://www.insider.co.uk/news/scotlands-private-sector-activity-sees-22006483
North expected to take brunt of CV-19’s economic impact in 2020
The North of England experienced record low levels of recruitment activity in April, according to KPMG and REC’s latest UK Report on Jobs. The findings of the monthly survey pointed to an unprecedented reduction in hiring, as additional KPMG data forecasts that almost half of the 10 local authority regions to be most economically impacted by coronavirus will be in the North. Service-based city centre economies, which benefit from workers’ ability to continue working remotely, are expected to weather social distancing rules relatively well. However, areas that rely on transportation, transport manufacturing, construction and tourism will be among the most affected. In the Northern job market, both permanent placements and temporary billings fell at the quickest rate on record during April, as business closures and increased uncertainty meant that demand for workers evaporated.
High street vacancy rate worse in Scotland than UK as a whole
Almost 13% of shops across Scotland are lying vacant, even before the effects of the coronavirus pandemic, according to a new research partnership between the Scottish Retail Consortium and the Local Data Company. The SRC-LDC Vacancy Monitor tracks changes to the retail landscape on a quarterly basis and found that in Q1 of 2020, prior to the lockdown, Scottish vacancy rates across all shopping locations was 12.9% in March 2020, a decrease from 13.0% in December 2020. The vacancy rate was 12.4% for high streets (12.4% in December 2019); 15.6% for shopping centres (16.0% in December 2019); and 9.4% for retail parks (9.9% in December 2019). The persistent Scottish vacancy rate – premises empty for two or more years – was 6.2%. Regionally, Scotland compared badly with the UK vacancy rate of 12.2%.
Manchester office market ‘well placed’ to weather the storm
The office market in Manchester is ‘well placed to weather the storm’ as a result of strong levels of occupier and investor demand, according to a senior figure at CBRE. Jonathan Cook, associate director of office agency at CBRE noted that 2020 was forecast to be a year of exceptionally strong growth, with a 1.8% rise in office based employment – the equivalent of adding 9,000 new office workers to the market – though this has been downgraded to 0.1% growth to reflect the impact of Covid-19. As a result, the office market is likely to be disrupted with occupiers prevented from conducting tours of buildings.