Business News Round Up (11/05/2023)

Scottish business sentiment reaches highest level since 2021

Scottish business sentiment has reached its highest level since 2021, according to the latest Addleshaw Goddard Scottish Business Monitor report.Despite the majority of firms expecting weak growth, nearly all sectors reported an improvement in business volume in the most recent quarter. With energy prices stabilising, fewer businesses anticipate reducing their operations due to high bills, dropping from half to around a third. This came despite only eight per cent of firms believing that the Energy Bills Discount Scheme, which replaced the Energy Bills Relief Scheme on 1 April, would adequately support their business in the next year. Produced in partnership with the University of Strathclyde’s Fraser of Allander Institute, the report surveyed 400 firms from across the economy. It showed that inflationary pressures may be easing, but 69 per cent of businesses (down from 81 per cent last quarter) still expect their prices to increase by more than normal this year as supply chain prices remain high. Encouragingly, all indicators of business concern — energy costs, price of inputs, staff availability, input availability, retention of staff, and interest rates — have seen a reduction in firm’s reporting them.

https://www.scottishlegal.com/articles/scottish-business-sentiment-reaches-highest-level-since-2021

Only 6% of UK businesses have confidence in Government to deliver economic growth in 2023

Only 6% of UK businesses have confidence in the UK Government to deliver economic growth in 2023. The survey, by accountancy network Moore UK, found that the majority of UK businesses do not have confidence in the Government to stimulate economic growth this year. There is considerable pessimism about the UK’s economic prospects in 2023. The International Monetary Fund (IMF) forecasts that the UK economy will shrink by 0.3% this year and perform the worst out of all G7 nations. The UK is forecast to be one of only two G7 economies – the other being Germany – to contract in 2023. Maureen Penfold, Chair of Moore UK says, “Business confidence in the UK economy has yet to fully recover from the mini-budget fallout. Business owners have been through a great deal in the past three years and are far from convinced that the near future looks much more positive. With interest rates expected to rise again, inflation still close to its peak and insolvencies increasing, businesses are still braced for economic turbulence. That’s going to continue at least in the medium term.” Moore UK’s survey also found that many businesses have major concerns about the value of hybrid working. 58% of businesses say that hybrid working makes it more difficult to train their people, while 64% believe that those working remotely miss out on the social aspect of the business.

Demand for temporary staff has increased for UK businesses

Demand for temporary staff has increased for UK businesses amid recession fears, trumping the employment for full-time workers, according to a new survey from KPMG and the Recruitment and Employment Confederation (REC).The survey revealed a rapid downturn of permanent placing from 49.3 points in March to 44.2 points last month – the fastest decline since the beginning of lockdown in 2021 – whereas the temporary index climbed from 52.5 points to 53.3 over the same time period. Britain’s economy has outperformed experts’ forecasts, avoiding a technical recession, as leaders such as the EY ITEM Club now expect growth to 0.2 per cent, up from the -0.7 per cent contraction projected in January’s Winter Forecast. However, it remains jittery and has knocked business confidence. The decline’s links to business concerns have led to many adapting their strategies in a bid to avoid long-term contracts and directing them to take on temporary staff who can help them grow but be quickly let go if necessary. Demand, as well as pay, is also rapidly rising as businesses try to outbid competitors for talent, with the permanent staff salary index jumping to 61.4 points and temporary staff pay hitting 57.9.

Boost for startups in manufacturing sector as development partner named for new innovation district

Startups in Scotland’s advanced manufacturing sector will be able to locate in a multimillion-pound ‘innovation district’ in Renfrewshire thanks to a new government-backed scheme. A development partner has been named for an ambitious construction project based around Glasgow Airport at Netherton, Inchinnan and Westway. Renfrewshire council is leading the development plan for the Advanced Manufacturing Innovation District Scotland (AMIDS). It promises to bring thousands of high skilled jobs by attracting UK and international advanced manufacturing companies to locate there. The council has confirmed it is forming a Development Partnership LLP with Tarras Park Properties Ltd, part of Buccleuch Property, to secure investment into AMIDS. This follows technical support from Avison Young to the council to secure the development partner and will see Buccleuch fund a 3,400-square metre facility for start-ups and SMEs as part of up to £7.6m towards the initial development phases. AMIDS centres on a 52-hectare Council-owned site Netherton being transformed into a modern, sustainable, employee-focused centre for manufacturing companies to locate to, where they can access advanced manufacturing technology and collaborate with specialists.