Business News Round Up (15/04/2021)

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UK businesses find ways to increase growth even in lockdown

Britain’s economy grew in February as businesses coped better with lockdown restrictions, official figures show. Gross domestic product (GDP) rose by 0.4% after a 2.2% decline in January, revised upwards from a 2.9% fall, the Office for National Statistics said. The figure was broadly in line with forecasts. The latest figures suggest that the economy is becoming resilient to lockdown as businesses adapt their operating models and consumers find new ways to spend. In April 2020, during the first lockdown, the economy contracted by almost 20%. Even the hardest hit sectors, such as accommodation and food services, eked out some growth and expanded by 2.6% during the month, while the wholesale and retail sector grew by 3.3%. These rises were partly offset by falls in information and communications and health output. Business surveys have picked up on signs that economic activity is starting to rise. The closely watched purchasing managers’ index surveys for March revealed a surge in activity as services, manufacturing and construction companies prepared for easing of lockdown.

Covid in Scotland: Pandemic leaves businesses ‘close to exhaustion’

Scottish businesses are “close to exhaustion” after 12 months of the “some of the most challenging trading conditions in modern history”. Scottish Chambers of Commerce said Covid restrictions and new rules for trading with the European Union had taken their toll. Its quarterly survey of 370 firms confirmed that retail had been worst affected. Tourism businesses are more positive as lockdown controls begin to be lifted. Non-essential shops are likely to be allowed to reopen on 26 April following a four month closure, while pubs, restaurants and cafes will also be able to reopen on a limited basis. The Scottish government has linked the emergence from lockdown to the rollout of the vaccine. On Tuesday Nicola Sturgeon confirmed that Scotland had “effectively met” its initial vaccination target.

https://www.bbc.co.uk/news/uk-scotland-scotland-business-56744859

UK insolvencies to nearly double global average

As markets set a course for recovery, Atradius’ Insolvency Forecast reveals the likely extent of business failures in the wake of the coronavirus pandemic. Entitled ‘2021: A turn of the tide in insolvencies’, the report forecasts that global business insolvencies are set to rise 26% in 2021 with a number of markets forecast to exceed that level by a significant margin. Australia tops the forecast with an expected rise of 88%, followed by France, Singapore and Austria with forecast increases of 80%, 75% and 73% respectively, while failure rates in the UK are expected to rise by 56%. The near across-the-board growth in insolvencies follows a year of anomaly where governments introduced fiscal measures and bankruptcies regime changes to protect businesses from failure. As a result, global insolvencies dropped 14% in 2020. Singapore, Australia, France, and Austria saw the greatest drop in insolvencies with declines between 40%-41%. Insolvencies in the UK fell by 27%. However, as central support is gradually unwound, a sizeable U-turn in failures rates is expected.

https://londonlovesbusiness.com/uk-insolvencies-to-nearly-double-global-average/

Edinburgh office market off to a positive start in 2021

Edinburgh’s office market got off to a positive start in 2021, despite ongoing lockdown measures restricting deal activity, according to analysis from Knight Frank. The independent commercial property consultancy said that around 90,000 sq. ft. of office take-up was transacted in the first quarter of the year across the city. This compared to 99,000 last quarter and 68,915 during the same period in 2020, largely before lockdown began to take effect in the UK. Among the deals concluded between January and March 2021 was Motorola taking 10,844 sq. ft. of office space at Caledonian Exchange, on which Knight Frank represented the landlord. Other significant deals included Trustpilot taking 9,500 sq. ft. at 28 St Andrew Square and MacRoberts, the law firm, securing 6,500 sq. ft. at 10 George Street. Demand for office space in Edinburgh has remained robust throughout the pandemic – around 500,000 sq. ft. of requirements are still on the market. The development pipeline has, however, continued to be restricted, with 281,000 sq. ft. of new space under construction.