Business News Round Up (17/05/2021)
Scottish economy sees further growth in April
The Scottish economy continued on its recovery path in April, according to the latest Royal Bank of Scotland PMI. The index, which measures both manufacturing and service sector activity, found that April enjoyed the quickest rate of growth for eight months. A rise in new work – the highest level three years – was a significant factor in the monthly data. Client demand had improved “noticeably” amid loosened lockdown restrictions, said the panellists. This in turn built up capacity pressure, which caused backlogs of work to build up for the first time in over two and a half years. In response, firms took on additional staff for the first time since January 2020, the bank said. The increase in workforce numbers during April marked the first round of job creation since before the Covid-19 pandemic. The rate of increase in employment was marginal overall, but slightly above the series long-run average. However, the growth in jobs was a tale of two sectors. Most were concentrated in manufacturing which highlighted a “notable divergence” to the service sector, the report said. Employment continued to decrease amongst service businesses, although the rate of reduction slowed on the month.
Third of SME leaders optimism about all restrictions lifting in June
As we enter the next phase out of lockdown, new research reveals nearly a third of SME leaders are optimistic about all restrictions lifting on June 21st, however they also fear future lockdowns and the impact this will have on their business. Despite the UK being on track to lift all social distancing restrictions next month, three in 10 SME leaders are unsure as to whether all measures will be removed by June 21st, while 26% believe that the removal of all restrictions by this date will be delayed. On the other hand, just one in 10 SME leaders believe all restrictions will be removed by June and there will be no future lockdowns. The research found that smaller businesses are the least optimistic about restrictions lifting. Micro businesses, those with 1-9 employees, are three times more likely to think the removal of restrictions will be delayed compared to medium businesses, with these figures standing at 21% and 7% respectively.
North West business activity rises at fastest rate since December 2017
Firms in the North West recorded a sharp and accelerated increase in business activity in April, in a sign of the region’s recovery gathering momentum as COVID-19 restrictions were loosened, latest UK regional PMI data from NatWest showed. The headline North West Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – climbed from 56.5 in March to 59.7 in April. This was its highest reading since December 2017 and signalled one of the fastest rates of growth since the start of the survey in 1997. Data showed strong increases in activity at both manufacturers and service providers.
More than 80% of businesses report that research activities were negatively affected by Covid-19, according to survey of 500 businesses
The vast majority (81%) of businesses that carry out research and innovation work in the UK reported delays or stoppages to research activities during the pandemic, according to a survey of 500 R&D active businesses published today. The new findings, published as part of the new report “Innovation and Resilience in a crisis: The impact of Covid-19 on UK Business R&D”, show that during the Covid-19 pandemic: 81% of businesses reported delays or stoppages to research; 12% of businesses had to stop research activity altogether; 77% of businesses saw delays to product/service demonstration, testing and/or trial production; 96% of businesses reported changes to collaborative projects with universities; a quarter of business respondents noted significantly reduced demand for university collaborations; more than a quarter (28%) of businesses cited insufficient government funding to leverage university collaborations as a key reason for making changes to projects, activities and interactions with universities.