Business News Round Up (18/09/2023)
Record export values for UK food and drink, worth £12bn in H1
The UK food and drink manufacturing sector posted record export values for the first half of 2023. According to data published by the Food and Drink Federation (FDF), UK food and drink exports were worth £12bn during H1, up from £11.5bn for the same period last year. The FDF Trade Snapshot, published bi-annually, found that much of this growth has been driven by EU member states. Export values to the EU increased by more than 7% year-on-year at a value of £6.9bn. A rise in export values was seen across most categories, but volumes have been impacted by challenges including labour shortages, rising wages and energy bill hikes. This has resulted in higher food prices, which in part explains the higher export values. Based on the FDF data, cheese was the UK’s top export during the first half of this year valued at nearly £400m. This marginally beat out chocolate, which recorded sales worth £386m. Salmon and breakfast cereals are also popular exports, and both posted values of above £350m. While more than half of the UK’s total exports value was driven by sales to the EU, exports to non-EU markets actually fell in value by 1.2% year-on-year.
Less than half of Scottish SMEs have a ‘rainy-day fund’
Less than half of SME companies in Scotland had a contingency fund in place before of the inflation spike earlier this year. That’s according to a UK-wide survey of 1,000 senior decision-makers by Cynergy Bank, which found that higher energy and finance costs have created cashflow challenges – with only 37% in Scotland having cash buffers in place prior to July 2022. The research also found that 60% had no contingency fund in place. Most bosses were slow to protect their businesses from rising borrowing costs, with as little as 3% fixing their mortgage or rent in the early stages of the Bank of England’s rate hiking cycle. But while rising inflation and interest rates have eaten into financial firepower, they have also accelerated the pace of change and innovation within businesses. The majority of respondents (90%) said that the cost-of-living crisis had caused them to make significant changes to their operations. SMEs say they are now budgeting more smartly, with about a third (31%) of those impacted by soaring overheads stating they have shopped around on suppliers. A larger number (43%) had switched materials, while 12% had resorted to using poorer quality goods, and a quarter have rearranged working patterns to save on energy bills. The majority of businesses (58%) said that tech and innovation had played a ‘huge’ part in their response to cost pressures, including circumventing traditional sales channels and innovating how their offering is sold.
https://www.insider.co.uk/news/less-half-scottish-smes-rainy-30949798
UK manufacturing firms put recruitment on hold amid slowdown fears
Plans by manufacturing firms to recruit more staff have stopped amid a slowdown in orders, new research suggests. A survey of more than 300 manufacturers showed they were “battening down the hatches” amid warnings of a sharp slowdown in activity and a potential recession. Make UK and business advisory firm BDO said their study showed that a positive picture of the first half of the year has gone sharply into reverse. As a result, Make UK has cut its manufacturing growth forecast for 2023 with output set to fall this year, while the forecast for next year is within the margins of no growth at all. Three out of four companies said they believe policy incentives elsewhere, such as in the EU and US, were making UK investments harder to justify. More than half of respondents said they have withheld investment in the last two years as a result of the uncertain business environment, and a similar number said they would have invested more in the last five years or, in the future, if there was a formal industrial strategy in place. Verity Davidge, policy director at Make UK, said: “Manufacturers are seeing a very sharp slowdown in activity as the potent cocktail of rising interest rates, cost of living and slowing overseas markets bites hard. As a result, they are now battening down the hatches in the expectation that the next year is going to be anaemic at best and, potentially, much harder.”
Construction begins on Bruntwood SciTech’s £42m Citylabs 4.0
The joint venture is eyeing a spring 2025 opening for 125,000 sq ft of specialist labs and offices, part of a wider cluster at Manchester University NHS Foundation Trust’s Oxford Road campus. GMI Construction Group has now started work on the workspace for developer Bruntwood SciTech. Bruntwood SciTech, a 50:50 JV between Bruntwood and Legal & General, secured planning permission for Citylabs 4.0 in 2020. Designed by Sheppard Robson, the project will provide seven storeys of lab and office space. These spaces have been designed to support companies working in precision medicine, including those in diagnostics, genomics, and biotech. Significantly, those working in the building will have access to specialist infrastructure to accommodate CL2 labs and specialist equipment. This includes increased floor loading, enhanced cooling systems and ventilation provisions, and a large platform lift. Located in the Oxford Road Corridor, the wider campus also provides a 150-person event space and multiple meeting rooms. The project is being delivered in partnership with Manchester University NHS Foundation Trust. This means that businesses will have direct access to the NHS trust, as well as the universities.