Business News Round Up (15/11/2021)
UK business sentiment hits 12 month low amid supply chain and inflation woes
British business sentiment dropped to its lowest level in a year in October, dragged down by fears of looming inflation and supply chain pressures that could undermine a sustained recovery from Covid disruption. Inflation expectations among UK business leaders surge to a record high last month, with 66% expecting non-staff costs to increase over the coming year – double the global average of 33%, according to Accenture and IHS Markit’s latest business outlook survey. Global supply chain concerns were the main driver behind the assumption that business expenses will spiral upwards, while the energy crisis further stoked fears. But as the labour market tightens further and living costs mushroom, business leaders’ expectations that they will have to raise staff salaries also surged to a record high of 75% – the highest level worldwide. This, paired with ongoing concerns about an ability to hire skilled staff, led to a drop in firms’ confidence in hiring in the next 12 months to 32%, down from a record high of 41% in June. As a result of these swelling costs, a record level of UK businesses are more willing to hike prices to protect margins. Accenture forecast a sharp increase in consumer prices over the coming year, as 60% of the cross-sector firms surveyed said they were planning a rise.
Scottish innovators attract record Venture Capital investment in Q3
Global Venture Capital (VC) investors deployed record amounts of money into Scottish scaleups over the summer, with more than £197 million raised according to Venture Pulse, a quarterly report published by KPMG Private Enterprise. The research, published using data supplied by PitchBook, recorded 57 transactions totalling £197 million invested into fast growth Scottish businesses in Q3 of 2021. The roll out of Scotland’s COVID-19 vaccination programme and greater business confidence in the post-Brexit environment and opening up of most sectors, resulted in a busy summer of transactions. Year on year, Q3’s figures also point towards growing investment in Scottish firms. During Q3 2020, £71.6 million was invested, and in 2019’s third quarter £32 million was invested. Looking back on the year to date, 20 deals valued at £64 million were recorded in Q1 2021, and Q2 finished with 60 deals with a value of £258 million.
Small exporters are shifting operations out of UK due to Brexit, survey suggests
More than one in ten small and medium-sized exporters (SMEs) have lost trade with the EU since Brexit, a survey suggests. A total of 13% of exporters said their trade with the EU has fallen by up to 100% since the end of the Brexit transition period, the Institute of Directors survey for said. A quarter (26%) of SMEs that trade with the EU are now considering moving some of their European operations outside Britain while 16% said they had already decided to move some or all into the single market due to Brexit. Nearly two-thirds (62%) of companies that trade with the EU say their costs have risen and the vast majority (70%) said they had to absorb this themselves, the survey of 635 SMEs suggested. Up to £9.5bn-worth of UK exports to the EU between January and July have had tariffs placed on them despite Boris Johnson’s “tariff-free” trade deal, separate analysis by Sussex University’s UK Trade Policy Observatory shows. Over the same period, imports from the EU fell by nearly a quarter (24.8%), while exports to the EU fell by 13.1% the analysis said.
Research finds Scottish businesses rising to meet net zero challenges
Scottish businesses are rising to meet the net zero challenge, with a majority confirming they have committed to or already achieved their carbon neutral aims, as new research shows a second consecutive quarter of growth in all sectors of the economy. The latest Addleshaw Goddard Business Monitor report, produced in partnership with the University of Strathclyde’s Fraser of Allander Institute, found 56% of companies have committed to achieving net zero, with 3% already having made the mark. While international attention remains on COP26 in Glasgow, Scottish businesses say the barriers to achieving more sustainable operations are cost (57%) and prioritising recovery from the pandemic (49%). Key measures already committed to in the push toward net zero include a commitment to recycling and reducing single-use plastics (78%) and companies’ requiring better sustainable practices in their supply chain (42%), while almost half (47%) of businesses will invest in educating senior management teams on the topic.
https://www.insider.co.uk/news/research-finds-scottish-businesses-rising-25444241