Business News Round Up (20/06/2023)
Global circumstances have affected 57% of businesses’ reinvestment plans
A survey of 508 business leaders and senior decision-makers has revealed that over half have had to adjust their reinvestment strategies due to aspects such as inflation and energy costs.The cyclical investment of funds into business is one of the major methods of influencing growth and increasing revenue. However, with the current global economic situation – has this been affected as a result? Speaking on the survey, Philip Brennan, Founder and MD at BusinessComparison, said: “Our exploration into businesses’ reinvestment plans and whether they’ve been affected yielded some interesting insights. Specifically, it was shocking to learn that over half of business leaders surveyed revealed their plans had been altered as a result of global circumstances. It was also intriguing to see the regions investing the most, with the East of England investing almost half of their profits on average. Although the current situation poses a real problem for businesses, it was encouraging to see so many maintaining reinvestment plans.’’ Firstly, they wanted to find out if businesses were still investing cash back into their business. The survey revealed that 53% do annually and 19% invest depending on profits received. The regions investing the most on a yearly basis were the North West (67%) and Greater London (66%), on the other hand, 17% from the East of England revealed they don’t reinvest despite making a profit. Of those who do reinvest, 23% said that they invest 11%-20% of profits or excess funds. Additionally, one-fifth stated that they invest 21-30%. The national average investment was a total of 37% of profits.
More than half of Scottish businesses plan to invest in skills
Firms in Scotland are committed to bridging the skills gap and investing in training and developing their staff over the next six months. More Scottish firms intend to invest in up-skilling their workers than all other regions and nations in the UK, as 56% plan to develop their teams. Research from Lloyds Bank identified that on-the-job training is the region’s most popular form of up-skilling new and existing staff (59%), followed by off-the-shelf courses and training materials (32%) and apprenticeships (31%). More than a quarter (27%) of firms in Scotland insisted that government investment in sector-specific training would help boost workers expertise in the region. Staff retention was identified in the research as the driving force behind the need to invest in training in Scotland, as 53% of companies identify this as the motivation behind the investment in development. Other businesses claimed that the training boost will help increase revenue (53%) and create greater productivity within the workforce (50%). Chris Lawrie, area director for Scotland for Bank of Scotland Commercial Banking, said: “It’s fantastic to see Scotland leading the way when it comes to training and developing their teams. Investment in training can have so many benefits for businesses, from increasing productivity among the workforce to encouraging new talent to join the company.”
https://www.insider.co.uk/news/more-half-scottish-businesses-plan-30268282
UK economic resilience offers mixed outlook
The UK economy is proving resilient, and its growth prospects have improved thanks to lower energy costs, more predictable fiscal policy, and better relations with its European Union trading partners. Nevertheless, the country faces stubborn inflation levels that continue to drive wage increases, making it unlikely that the Bank of England (BoE) has finished raising rates, nor will begin easing before mid-2024. Expectations for the UK’s growth prospects have rebounded in recent months. As recently as January 2023, the International Monetary Fund (IMF) forecast that the economy would contract by -0.6% this year, the worst Gross Domestic Product performance among advanced economies. Instead, we expect that the country will avoid recession entirely to post slightly positive annualised GDP growth (in May, the IMF revised its growth outlook for the year to 0.4%). That still remains the weakest reading of any major economy but is a remarkable turnaround. Nevertheless, core inflation that excludes energy and food continued to rise, from 6.2% in March to 6.8% in April, underlining that the BoE has not yet finished its job in stabilising prices. Over the same period, headline inflation slowed to 8.7%, from 10.1%, including an 80% fall in energy costs since 1 December 2022. Food prices rose more than 19% in the year through March 2023, their fastest pace in more than four decades, according to the Office for National Statistics (ONS). On 13 June, responding to April’s data, BoE governor Andrew Bailey warned that inflation is “taking a lot longer than we expected” to decline. Mr Bailey said in May that the effects of rising interest rates “are still working their way through the economy.”
Edinburgh named most ‘AI ready’ city in UK outside London
Edinburgh has been named the most ‘AI ready’ city in the UK after London, according to a new survey. The SAS AI Cities Index 2023 has revealed Scotland’s capital to be a hotbed of artificial intelligence, based on a number of metrics. They are AI-related job ads, the number of AI companies in the city, the number of tech meetups and the value of InnovateUK funding granted in each area. Edinburgh was home to the highest number of courses that feature an AI element, after SAS combed through every course offered in UK universities to understand how AI is used in tech-based and non tech-based degrees. Universities in Edinburgh are also making waves in AI. InnovateUK has awarded multiple grants worth millions of pounds to research projects at the University of Edinburgh, Heriot-Watt and Edinburgh Napier. Popular tech hubs Cambridge and Oxford came in second and third for ‘AI readiness’ due to their landscape for AI career opportunities, institutions based in the city and high life satisfaction, too. The analysis also revealed which parts of the UK have seen the biggest growth in AI-readiness since the 2022 index was published last year. Newry, in Northern Ireland, came last in 2022, but has since risen from 74 to 25, a huge jump of 49 places.