Business News Round Up (16/05/2023)
Unemployment: Numbers rise in UK with mixed picture for Scotland
The rate of unemployment in the UK has risen, though it fell slightly in Scotland. The Office for National Statistics (ONS) has released its figures for the three months up to March 2023, showing an unemployment rate of 3.9 per cent for the UK as a whole, up 0.1% on the figures to December 2022. In Scotland the rate of unemployment fell by 0.2% but employment also declined by 1.2% thanks to a 1.4% rise in those becoming ‘economically inactive’. That is defined as people aged between 16 and 64 not in employment who have not been seeking work within the last 4 weeks and/or are unable to start work within the next 2 weeks. The unemployment rate for Scotland stands at 3.1%, below the UK average, but the employment rate of 75.3% stands below the average for the country as a whole. That is because the economic activity rate stands at 22.2%, while for the UK as a whole the figure is 21%. Between December and February the rate of unemployment was at a record low of 3%, with the latest figures for January to March bringing a slight uptick. For the latest figures the unemployment rate for men – 3% – is the lowest since records began in 1993, while the same figure for women is 3.2%. In total just under 2.6 million people are in work across Scotland. The highest employment rate estimates in the UK were in both the South East and South West (78.8%) and the lowest was in Wales (71.5%).
Scottish annual salaries ‘showing signs of a bounce’
A comparison of first quarter data from 2021 to 2023 has revealed a 15% in the median hourly pay rate in Scotland, compared to the median annual salary, which declined by 1%. However, in the same period from 2022 to 2023, Scotland experienced a 6% rise in annual salaries, as well as an 8% hike in hourly pay rates. That’s according to analysis of more than 30,000 job postings across all Scottish regions and business sectors on the HiJOBS website. This also found that pay growth in the care, construction and energy sectors has been particularly strong each year since 2021, with median hourly pay rates rising 21%, 36% and 13% respectively. The median hourly pay rate for jobs in care jumped 21% year-on-year (from 2022 to 2023) to £13.90, with the median annual salary up 11% to £27,897. The hourly pay rate in construction, trades and property leapt 36% year-on-year to £22.27, with annual salaries stepping up 12% to £34,834. Hourly pay for jobs in energy increased 13% to a median rate of £15.05, with annual salaries up 8% to £32,766. The data suggests a ‘firefighting’ short-termism came into play by employers as they battled economic volatility, with Scotland’s job market providing better paid short-term opportunities, particularly in hospitality, care and driving vocations. However, this may have been at the expense of longer-term career roles, with jobs advertised on an annual salary basis seeing stagnation or decline in pay over the same period.
https://www.insider.co.uk/news/scottish-annual-salaries-showing-signs-29983131
UK circular economy deals continue to rise
In a report launched today by accountancy and business advisory firm BDO LLP, figures show up to £1.3 billion has been deployed into circular economy investments in 12 months. Disclosed capital deployed has increased by 10% from £788 million in 2021 to £879 million in 2022. The circular economy is a model of production and consumption, which involves sharing, leasing, reusing, repairing, and recycling materials and products for as long as possible. This differs from the traditional, linear economic model, which is based on a make-consume-dispose pattern. BDO’s Investment into the UK Circular Economy report found growth capital investor, BGF has been the most active UK circular economy investor over the past 12 months with nine investments completed in 2022. Venture capital investors accounted for 62% of 2022 UK circular economy deals with an average disclosed cheque size of £4.9 million. Mid-market private equity investors made up 17% of 2022 UK circular economy deal volumes. Rory McPherson, corporate finance partner, said: “The transition away from linear business models creates value while working towards sustainability goals. As ESG continues to move up the agenda, circular economy businesses are extremely attractive to investors and BDO is ideally placed to advise the ambitious entrepreneurs and pioneering PE-backed businesses in the sector.”
International students boost UK economy by £41.9 billion
New data reveals that the intake of international students in the 2021/22 academic year contributed a huge £41.9 billion to the UK economy. A new report, The costs and benefits of international higher education students to the UK, published jointly by Universities UK International (UUKi), the Higher Education Policy Institute (HEPI) and Kaplan International Pathways in collaboration with London Economics, reveals the growing importance of international students to local economies throughout the UK. The report, which was commissioned to explore the impact of international students to the UK economy, reveals the total economic benefits have risen from £31.3 billion to £41.9 billion between 2018/19 and 2021/22, an increase of 34%. The data also confirm that – even when accounting for the impact on public services (estimated at £4.4 billion) – the economic benefits of hosting international students significantly outweigh the costs, with a total net benefit of £37.4bn to the UK economy. The net economic impact of international students has seen a dramatic rise over the past few years – up 58% since 2015/16 (£23.6 billion to £37.4 billion). One reason for this is the 68% rise in the number of new international students (350,145 in 2021/22) from non-EU countries since 2018/19. Data from the report indicate that every 11 non-EU students generate £1 million worth of net economic impact for the UK economy – or £96,000 per non-EU domiciled student.