Business News Round Up (18/10/2021)
CFOs expect another year of labour and supply shortages
Finance leaders do not expect any easing of labour shortages and supply disruptions until for at least a year, according to Deloitte’s latest UK CFO survey. Three quarters believe there will be recruitment difficulties for a further 12 months while 59% report disruption to supplies. CFO expectations for a rise in operating costs have reached a record high and they see inflation running higher for longer, with 54% expecting it to exceed 2.5% in two years’ time, a marked rise from 32% in Q2. The majority (52%) expect the Bank of England’s base rate to be 0.5% or higher in a year’s time. Despite this, finance leaders continue to focus on growth, with introducing new products or services and expanding into new markets remaining their top balance sheet priority. CFOs are placing greater emphasis on increasing capital expenditure now than at any time in the 14-year history of the survey, with 29% rating it as a strong priority.
Supply chain issues and rising costs loom large in profit warnings
Supply chain and cost-related issues were cited in four of the five profit warnings issued by listed companies in the North, it has been revealed. Businesses and customers are suffering increasing disruption from empty shop shelves and rising prices caused by a shortage of HGV drivers and rising costs linked to the increasing costs of training more drivers on higher wages. EY Partheon’s latest Profit Warnings report showed that the North saw a reduction in profit warnings among listed companies in the third quarter of 2021. The five warnings were the lowest of any quarter since the fourth quarter of 2014, when four warnings were issued, and a 38% decrease on the second quarter of 2021. Sam Woodward, EY-Parthenon turnaround and restructuring strategy partner in the North West, said: “Although profit warnings issued by listed companies in the North have fallen – bucking the national trend – it’s clear that businesses are facing significant challenges with their supply chain and the cash stresses that have cascaded through the economy.”
Covid in Scotland: vaccine passport scheme enforceable by law
The Scottish government’s vaccine passport scheme has become enforceable by law from Monday morning. Nightclubs and large events, like some football matches, will only be able to allow entry to people who can show they have had two doses of a Covid vaccine. The scheme came into effect on 1 October after MSPs voted to back the proposals. Businesses were given a 17-day “period of grace” to allow venues time to test out their procedures. People who have had two vaccines in Scotland can download or get a paper copy of a certificate with a QR code. Everyone over the age of 18 must now show – if asked – that they have had both doses of the vaccine before they are allowed entry to certain venues and events. The scheme requires venues to put in place a “reasonable system” to check the status of customers, with certain exemptions on medical grounds.
Businesses sign up to low carbon innovation with ECO-I North West
More than 80 North West businesses have signed up to a “first-of-its-kind” research and development programme for low carbon innovation. Eco-I North West is a £14m initiative offering SMEs in any sector the opportunity to collaborate with and access the knowledge base, research facilities and skills of six of the region’s universities. These are Lancaster, Central Lancashire, Cumbria, Liverpool, Liverpool John Moores and Manchester Metropolitan. The programme, part funded by the European Regional Development Fund, will work with more than 300 small and medium sized enterprises (SMEs) across the region over the next two years. It will support the development of 135 new innovative solutions which will save 3,850 tonnes of CO2. This is support for businesses to “build back better”, enabling R&D, and building networks to drive innovation, which is viewed as good for business and better for the environment. Among the businesses already signed up to Eco-I NW are Fibrestar Drums, Biotech Services, Designed Network Solutions, Enviroo, National Air Quality Testing Services, REPIC, Barker and Bland, Kerax, CO2 Extraction, Stopford Projects, and Silverwoods Waste Management.