Business News Round Up (12/04/2022)
Labour shortages exacerbated by growing problem of long Covid
Labour shortages have hit the aviation industry particularly badly, limiting its ability to bounce back from the depths of the pandemic when tens of thousands of staff were let go. British Airways and easyJet had to cancel scores of flights last week because of a lack of staff, including those suffering from rising numbers of Covid-19 infections. Heathrow plans to hire 12,000 new workers, but in the meantime holidaymakers have been warned to expect disruption when travelling over the spring and summer. Absences caused by Covid-19 continue to exacerbate problems across the public sector too. This weekend NHS leaders hit out at the UK government’s “living with Covid” strategy, as the number of people in hospital with the virus spiked and the number of NHS staff off-sick continued to rise. Labour shortages could also result in the British food industry shrinking permanently, according to a UK parliamentary report last week. In the US, industries from retail to holiday resorts are bumping up starting pay to attract new recruits and increase the wages of their existing staff as inflation soars at its fastest rate in 40 years.
https://www.ft.com/content/836dd175-f923-478b-80cb-f83e287419f5
FTSE 100 falls as UK GDP grows 0.1%
The FTSE 100 dropped 0.5% to 7,634 on Monday after the UK GDP growth missed economist estimates and grew at just 0.1% in February. Production costs have skyrocketed as a result of Russia’s invasion of Ukraine and supply chain concerns, with the prices of critical metals and computer chips in the tech industry pounding the manufacturing sector. For a sense of confidence, the economy turned to the weakening services sector, which increased by 0.2% and helped boost real GDP 1.5% higher than before Covid-19. However, the outcome is not entirely positive for the UK economy. Markets across Europe were jittery today with French elections, low UK GDP growth and increasing Covid related problems in China hurting stocks from all segments in the FTSE 100. “It’s a difficult time to be an investor given how markets stubbornly refuse to break out into a decent rally. So far this year we’ve had enough ups and downs to make anyone owning shares and bonds travel sick,” said Danni Hewson, Financial Analyst, AJ Bell. Tech shares or trusts invested in tech shares like Scottish Mortgage Investment Trust and Ocado were amongst the top fallers on the FTSE 100 on Monday as investors dumped the sector on the prospect of rising interest rates that will “reduce the value of future cash flows” making the tech space “less appealing” suggested Danni Hewson.
RBS partners University of Edinburgh for £1.5 million sustainability training programme
The Royal Bank of Scotland has announced a £1.5m, three-year partnership with the University of Edinburgh’s Centre for Business, Climate Change and Sustainability. This aims to deliver a climate education programme to more than 16,000 people across the banking group by the end of 2024. It will also support the delivery of a climate change transformation training programme for those in roles that require a broader level of knowledge. Experts from the university will work alongside business banking specialists to deliver the 12-week online programme to relationship managers and other staff in priority roles. It is hoped that bank staff will then be able to help Scottish business customers identify the opportunities a net zero economy can create and become more sustainable in the process. This year will also see the roll-out of sector-specific climate training programmes across commercial property, retail and leisure, and manufacturing. The university and RBS will work with Cushman and Wakefield to provide the commercial property training; Circuthon Consulting, Helen Chambers Consulting and My Little Green Wardrobe to provide retail and leisure training; and Warwick Manufacturing Group at Warwick University to deliver manufacturing training.
https://www.insider.co.uk/news/rbs-partners-university-edinburgh-15-26685899
Rising prices hurt growth at North West businesses
Rising prices has seen the rate of growth slow in the North-west according to NatWest’s latest Purchasing Managers Index (PMI) survey of the region’s businesses. NatWest’s March PMI data showed businesses in the region were reporting a record increase in the prices they were charging to customers for both goods and services as a result of rising costs. As a result, the high street bank’s North West Business Activity Index stood at 56.9 in March, just slightly up on February’s 56.7 figure, despite all Covid-19 restrictions coming to an end, and below the average growth rate of 60.9 being recorded across the whole of the UK. Despite this, the region remains one of the most optimistic about the future economic picture, particularly following the coronavirus pandemic, albeit dimmed slightly by uncertainty around the ongoing Russian invasion of Ukraine. Hiring intentions and new job creation continued to rise in March, with growth in new jobs climbing in the region to its fastest in five months.