Business News Round Up (17/04/2023)
Scottish private sector activity expands for the second month running
The Scottish private sector saw a second successive monthly rise in business activity, with underlying data showing quicker growth across both the manufacturing and service sectors. According to the latest Royal Bank of Scotland PMI data, the rate at which private sector output grew was the strongest in nine months, with the Scotland Business Activity Index rising from February’s 51 to 52.9 in March. This compared favourably against the UK as a whole (52.2), where the rate of expansion slowed. Furthermore, firms across Scotland noted a solid and accelerated rise in new business inflows in March. In turn, back-to-back expansions were noted in private workforce numbers, again the latest rate of job creation quickening on the month and signalling the strongest intake of staff since last July. Private sector companies across Scotland signalled a second monthly rise in volumes of new business at the end of the first quarter. The upturn was quickest since last May. The rise in business inflows was attributed to an array of reasons, including increased advertising and investment, stronger sterling against the dollar and improved client demand. Nonetheless, the uptick in new order inflows was weaker than that recorded for the UK as a whole. While the degree of confidence weakened in March, due to a slight dip in optimism at service providers, business sentiment towards 12-month activity was highly positive and above the historical trend. Optimism stemmed from greater client enquires, new business development, higher marketing, and new contracts in the pipeline. Confidence across Scotland, however, posted the third weakest of all the monitored UK regions, ahead of the north east of England and Northern Ireland.
https://www.insider.co.uk/news/scottish-private-sector-activity-expands-29727844
UK entrepreneurs made £11.8bn by selling their business in last year, research reveals
UK entrepreneurs have made £11.8bn from selling their businesses in the past year shows research by Bowmore Asset Management.That was 59% lower than the £29.1bn UK entrepreneurs made from selling their businesses in the previous year (2019/20). The fall in the amount of money that UK entrepreneurs made was partly due to the early part of the Covid-19 pandemic causing a slump in M&A activity. The economic slowdown of the pandemic meant entrepreneurs became more reluctant to sell at reduced valuations. Prospective buyers were also put off from buying UK businesses in the first six months of lockdown due to major uncertainty over the economic effects of the pandemic. In addition, lingering concerns over social distancing meant that due diligence, needed as part of the M&A deals, was harder to undertake.
Expansion softens as region slumps to weakest national growth figure in March
Back-to-back monthly expansion in business activity has been recorded in the region, although February’s strong return softened significantly. The NatWest Yorkshire and Humber PMI Business Activity Index remained in positive territory, but it dipped from the eight month high leap to 52.6 back to 50.7. At just above the no change 50.0 mark, it gave the region a rare ranking as one of the weakest-performing at the end of the first quarter, against a national average of 52.2. Although it was the lightest rise in new business, it was the best improvement in order books for the past six months. Malcolm Buchanan, chair of the NatWest North Regional Board, said: “A sustained upturn in private sector output in March is good news, rounding off a positive opening quarter of the year despite January’s decline. However, activity and new order growth across the region lagged behind that seen across the UK as a whole in March, with Yorkshire & Humber firms ranking among the bottom performers on both counts. Encouragingly, a strengthening of business confidence to a 10-month high suggests that companies are looking beyond March’s slowdown and are optimistic of growth in the coming year.”
UK inflation poised to slip out the double digits for first time since last summer
UK inflation is poised to slip out of the double digits for the first time since last summer in what could be the beginning of the cost of living crisis gradually releasing its grip on families over the rest of the year. Official figures from the Office for National Statistics (ONS) on Wednesday are expected to show inflation trimmed to 9.8 per cent in March, down from 10.4 per cent. A large drop in petrol prices is tipped to bring down the consumer price index, Britain’s main measure of inflation. Most economists reckon inflation will now fall throughout the year, possibly to around three per cent by Christmas. It has been in the double digits since last September. But there are likely to be strong price pressures hidden within the numbers, with the rate of core inflation poised to stay elevated. Core inflation – expected to fall slightly to six per cent – has become market participants’ key gauge of how much inflation is persisting in response to the Bank of England’s eleven successive interest rate rises to a post-financial crisis high of 4.25 per cent.