Business News Round Up (13/01/2022)
New data shows resilience of Scotland’s scale up businesses in onset of pandemic
92% of Scotland’s scale up companies successfully maintained a strong upwards growth trajectory in the first year of the pandemic, reveals independent Scottish law firm, Morton Fraser. According to newly published data from the Office of National Statistics, 745 of the country’s 805 high growth businesses in 2019 continued to perform well going into 2020 and increased their growth despite the pandemic. ‘High growth’ refers to enterprises with an average growth greater than 20% per annum over a period of three years. 22 local authorities managed to maintain or increase the number of scale up businesses in their region in the first year of the pandemic, while just 10 council areas saw their count decrease. Dundee, Inverclyde, and North Lanarkshire all ended the first year of the pandemic with more scale up businesses than they started with, while Angus saw the largest proportionate drop in businesses.
Entrepreneurs could hold key to unlocking UK economic growth
The latest Companies Register shows that despite the economic uncertainty, there were 810,316 company incorporations in 2020/21, an increase of 59% when compared with 2019 to 2020 and the highest number of incorporations on record.The latest data from The Instant Group shows that 584,097 companies* have been registered in the UK since the start of 2021 – this equates to 1,781 per day. The most companies registered in 2021 so far have been in London, Birmingham, and Manchester. The growth in start-ups has fuelled an increase in demand for flexible workspace across the UK’s cities, with large proportional increases outside London. Requirements for coworking and serviced offices has grown significantly in cities such as Bristol (41%), Manchester (28%), and Reading (27%) over the past year. Since 2018, Manchester (51%), Bristol (31%) and Newcastle (22%) have seen the biggest increase of enquiries of flexible workspaces. While London has remained flat, the capital continues to dominate its share of the market with 21% of all UK enquiries – the same market share seen in 2020 & 2019.
Job placements rise in December, but concerns remain that Covid might soften the market
Hiring activity across Scotland continued to increase in December, according to the latest Royal Bank of Scotland Report on Jobs. Permanent placements rose at the steepest pace for three months, amid reports of strong demand for staff, however, pandemic-related concerns weighed on the amount of work available for short-term staff, with the rate of increase in temporary billings easing to the weakest since the current period of expansion began in September 2020. At the same time, vacancy growth slowed further, although demand for staff continued to rise at a marked pace by historical standards, while candidate availability dropped steeply again. Subsequently, pay pressures remained intense. The report, compiled by IHS Markit, is based on a monthly survey of around 100 recruitment and employment consultants. December data pointed to a further rise in the number of permanent staff appointments across Scotland, stretching the current sequence of expansion which began last January. Improved confidence and stronger demand for staff were cited by respondents as drivers of the latest uplift. Moreover, the rate of increase accelerated to a three-month high and was sharp overall and outpaced the UK-wide average.
https://www.insider.co.uk/news/job-placements-rise-december-concerns-25924784
One in three tourism firms expects to fail this year
A £9 million package of support for the tourism sector, announced today by the Scottish Government, won’t be enough to save up to one in three operators going out of business, said a trade body. Tourism Minister Ivan McKee said the money would help a range of businesses, including coach operators, hostels, and visitor attractions, survive the winter. But Marc Crothall, chief executive of the Scottish Tourism Alliance, said businesses needed “positive messaging” that would encourage bookings for the summer season, as well as help with costs such as VAT. A survey conducted by the STA revealed that one in three tourism and hospitality businesses say they are likely to fail in 2022. Just over half of all respondents said that they had either zero or just one to two months of cash reserves to stay afloat. Two-thirds (68%) said they were in financial difficulty, citing extreme concern over increased costs, particularly in relation to utilities. Mr Crothall said the survey showed the “deep financial pain and commercial instability” being experienced as a result of the recent measures.