Business News Round Up (11/10/2021)
UK business output falls to lowest level since lockdown
Business output has shrunk to its lowest level of growth since the reopening of the economy as staff shortages and supply chain disruptions battered productivity last month.The closely-watched BDO Output Index suggests a slowdown across both manufacturing and services, falling more than five index points month-on-month to 100.69, effectively indicating average trend growth just months after the UK opened up. The firm’s inflation index meanwhile jumped to a near ten-year high in the same month, as average prices continued to increase. It is the latest in a series of data that suggest the UK recovery is slowing considerably, putting more pressure on Rishi Sunak ahead of the budget due at the end of the month. Last week IHS Markit warned of a “severe loss of momentum” across the construction sector, often a bellwether for wider economic activity. The rise in energy prices, driven by higher wholesale natural gas costs, is being felt right across the economy.
Brexit and Covid blamed for plunge in exports
Scottish exports fell by 14% in the year to June 2021 compared to the previous year – the highest in the UK. England, Wales, and Northern Ireland also saw a decline in exports – by 2.2%, 13% and 6.1% respectively. Scotland’s imports also fell by 3.9% – with England’s decreasing by 2.3%, Wales by 10%. Northern Ireland’s imports rose by 3.8%. The SNP’s International Trade spokesman Drew Hendry said: “These are devastating figures which clearly show that the warnings about Brexit and the impact it would have on trade were justified. HM Revenue & Customs said: “The combined effects of coronavirus (COVID-19) national and international lockdown restrictions and EU exit uncertainty have all been contributing factors to the erratic nature of recent UK and global trade.
Short-term planning threatens entrepreneurial growth and innovation in the region
A new report which looks at barriers to growth for entrepreneurial businesses has revealed 70% of companies are only planning nine months ahead, despite ambitions to launch new products and services and three quarters lacking confidence that their strategy is future-proof. According to BDO’s The Ambitious Entrepreneur: Tackling Your Barriers to Growth Report, two fifths of the companies surveyed are only planning six months ahead, which means they only have visibility until March next year. More than three quarters of companies shared they’re likely – to some degree – to test out new business ideas or innovate this year and next, but 21% recognise a lack of planning will prohibit this innovation. BDO’s research found that a third of respondents try to handle operations, growth, funding, talent, and compliance internally with their existing team.
Scottish hiring activity continues to surge during September
Hiring activity across Scotland continued to surge in September, according to the latest Royal Bank of Scotland data, rounding off a third quarter of unprecedented labour market activity. Further marked increases in both permanent placements and temporary billings were signalled by recruiters, with the rates of growth remaining close to their respective series records, despite easing since August. Demand for workers remained strong, as growth of vacancies for both permanent and temporary staff continued to rise rapidly. At the same time, the availability of candidates plummeted again. As a result, pay pressures intensified, with the rate of starters’ salary inflation hitting a fresh survey record. Recruiters across Scotland reported a further increase in the number of permanent staff appointments during September, amid reports of strong demand for staff as companies were continuing to step up hiring efforts. The rate of expansion slowed from August’s peak but was nonetheless the third-fastest on record. A similar trend was observed for the UK as a whole in September, where the rate of increase in permanent placements also slowed, but growth remained slightly faster than in Scotland.
https://www.insider.co.uk/news/scottish-hiring-activity-continues-surge-25159898