Business News Round Up (19/08/2022)
Number of UK sectors showing fall in output reaches 18 months high
The number of UK sectors reporting falling output approached levels not seen since periods of lockdown, according to the latest Lloyds Bank UK Sector Tracker. Nine of the 14 sectors monitored by the Tracker saw their output contract (vs. four in June) – the highest number since January 2021. The transportation sector (37.7), which includes airlines, hauliers, and rail operators, was impacted by national rail strikes and staff shortages, resulting in the fastest fall in activity of any sector monitored. In addition, ten sectors reported falling demand (vs. nine in June), representing the highest number since June 2020. An unwinding of post-pandemic pent-up demand and increases in the cost of living impacted tourism and recreation (40.3), which includes pubs, hotels, and leisure facilities. A reading on the Tracker above 50 indicates expansion, while a reading below 50 indicates contraction. However, the Tracker also showed a more positive position on supply chain pressures and input cost inflation, with both easing in July. Of the seven manufacturing sub-sectors monitored by the Tracker, fewer supplier delivery delays were seen in 5, (up from 4 in June), and reports of higher material prices fell to their lowest level since February 2021.
Poll shows lack of confidence in government inward investment policy
A new survey has shown that 76% of Scots believe Scotland is a good place to do business, with just 12% disagreeing with that statement. However, only 44% think that the Scottish Government has the right policies in place to make Scotland and attractive place for inward investment, with 38% stating it does not have the right policies in place. The poll was conducted by Survation on behalf of True North at the start of August among 1,002 Scottish adults, finding that hospitality and tourism (with 71%) was believed to be the most important sector in terms of recovery and growth following the pandemic. The energy sector followed on 65%, with the food, drink and agriculture industries just behind on 62% and financial and professional services some way back on 41%. Asked whether they were aware of the contribution that the financial services and professional services sectors make to Scotland’s economy, 10% were ‘not at all aware’, 39% stated they were ‘not that aware’ and 35% said they were ‘quite aware’. These sectors represent 9.2% of Scottish gross value added (GVA), so once given this fact, 80% of respondents said they thought they were ‘important’ to the future success of the nation’s economy, while 9% said ‘neither important or unimportant’ and just 3% said ‘unimportant’. The research was published at an event last night, organised by advisory firm True North and Scottish Financial Enterprise (SFE), which sought to discuss Scotland’s growing presence as a global financial centre and to explore the key challenges and opportunities ahead.
https://www.insider.co.uk/news/poll-shows-lack-confidence-government-27774298
New data shows small businesses received £21.3 billion in COVID-19 local authority business support grants
Smaller businesses across the whole of England received £21.3 billion through the government’s COVID-19 Local Authority Business Support Grants scheme, a new report has shown. Micro, small, and medium sized firms across different business sectors benefited from the funds available under the scheme, which was created to support businesses during and to recover from the impact of the global pandemic. The new data – which includes a sector breakdown for the first time – shows over one-third of all available funding was allocated to the accommodation and food services sector, a part of the economy hit hardest by the pandemic. The grant scheme was created by the UK government and administered by local authorities, with all regions in England found to have allocated most of their total available funds to businesses in need. Data shows the accommodation and food services sector received the most funding. Businesses in this sector have also seen significant support from the government’s Hospitality Strategy, published in July 2021. Firms operating in wholesale retail, arts and entertainment, recreation, and other services industries were also among the different business sectors to receive substantial help under the scheme.
Scottish Enterprise continues to support a growing early-stage equity market
Scottish Enterprise today, 18 August 2022, revealed that 2021/22 continued to be a record year for its early-stage investment activities. The enterprise agency, which has been investing in early-stage businesses since 2003, alongside local, national, and international private sector investors, recorded investment of £50.71 million into 102 early-stage high growth investment opportunities – which in turn helped leverage a further £257 million from private sector investors resulting in over £307 million of growth finance for innovative, ambitious early-stage Scottish businesses last year. 2021/22 proved to be the strongest on record for attracting international co-investment with more than half of the finance leveraged coming from global Venture Capital firms and corporate investors. This was as a result of ongoing work to build investor networks internationally, complementing the work of the Scotland’s Global Investment Plan, and underlines the vibrancy of Scotland’s investment market and the international appeal of Scottish companies. 2021/22 also saw an increasing number of businesses continuing their growth journey under new ownership having successfully reached the stage where exit opportunities are available for early investors, allowing Scottish Enterprise to generate £106 million of income.