Business News Round Up (20/01/2022)
Pandemic has cost Scottish cities more than half a year’s worth of high street sales, new Centre for Cities report reveals
COVID-19 has cost city centres in Scotland more than half a year’s worth of potential takings since March 2020. This is according to Cities Outlook 2022 – Centre for Cities’ annual economic assessment of the UK’s largest urban areas. Central Edinburgh is worst affected, losing 43 weeks of sales between the first lockdown and Omicron’s onset. Businesses in Glasgow and Aberdeen city centres are also hard hit. Dundee’s city centre lost the fewest weeks of sales (32 weeks) in Scotland during the pandemic. Across Great Britain, Covid-19 has cost businesses in city and large town centres more than a third (35%) of their potential takings since March 2020, with central London, Birmingham, Edinburgh, and Cardiff worst affected. Across the 52 city and town centres studied, 2426 commercial units have become vacant during the pandemic, against 1374 between 2018 and 2020. High streets in economically weaker places have been less impacted by Covid-19. Meanwhile in economically stronger places, business closures increased during the pandemic.
Employment gap may weigh on growth and spur inflation in the US and UK, IMF says
About two years since the coronavirus pandemic upended labour markets globally, job openings are plentiful in many advanced economies, yet workers have not fully returned, according to the International Monetary Fund. This gap, in which the employment rate is below the pre-Covid levels, is playing out in the US and Britain, the Washington-based lender said on Wednesday. In the US and UK, the recent labour market puzzle can be partly explained by a mismatch, the pandemic’s effect on women [in the US] and older workers leaving the workforce, it said. “If the broader trend of plentiful jobs and not enough workers continues, it can have major implications for growth, inequality and inflation,” said Carlo Pizzinelli, co-author of the white paper and an economist in the fund’s regional studies division. “A continued sluggish employment recovery amid sustained labour demand could constrain economic growth while fuelling wage increases.” Global unemployment is expected to remain above pre-coronavirus levels until at least 2023 as the pandemic continues to weigh heavily on global labour markets, according to a report by the International Labour Organisation this week.
Chambers’ survey reveals resilience, but fears over impact of inflation
A survey conducted prior to the Omicron outbreak shows Liverpool City Region businesses were feeling increasingly optimistic about their future performance. The Quarterly Economic Survey conducted by the five regional Chambers of Commerce – Liverpool & Sefton, Knowsley, Wirral, Halton and St Helens – found members were demonstrating some positive trends in overall recovery and confidence for future turnover and profitability. However, the ongoing stagnation of the national economy was similarly reflected in the city region, with growth inhibited by a combination of factors including rising inflation, a shortfall of available labour to meet business demand, supply chain pressures and costs, particularly concerning raw materials and energy. The five chambers say the survey demonstrates the importance of tackling critical issues in the city region, including building a future labour market to meet employer needs, reducing cost burdens on employers as they continue to rebuild and capitalising on its place-based assets to stimulate a dynamic, entrepreneurial culture and proposition for investment.
Rising costs seep into every sector of UK economy
Every sector of the British economy is suffering from swelling costs in a sign that inflation will trend much higher in the coming months, reveals a fresh study published today. Higher wages, compounded by soaring energy and raw material costs, are severely eroding firms margins, according to research carried out by high street lender Lloyds. The fresh figures reinforce official data published by the Office for National Statistics yesterday showing British businesses’ input costs have soared 13.5 per cent over the last year. Jeavon Lolay, head of economics and market insight at Lloyds, said firms’ cost backdrop remains “acute as higher energy prices and wage bills pushed up firms’ expenses”. Widespare cost increases have ensnared British businesses since the UK emerged from Covid-19 restrictions last spring, mainly triggered by a global supply chain crisis and an energy crunch on the Continent. The spread between British firms’ costs and prices is the joint highest of any country tracked by Lloyds, raising the prospect of inflationary pressures worsening if businesses hike prices in an effort to shield their margins.