Business News Round Up (22/04/2024)
Administrations reach highest level since pandemic
The number of companies in the North West of England filing for administration has reached the highest level for Q1 since the start of the Covid-19 pandemic, according to figures from Interpath Advisory. Analysis of notices in The Gazette by Interpath shows there were 70 administrations across the North West in Q1 2024, a further rise on last year’s corresponding figures (Q1 2023: 60) as the number of companies filing for the process continued its upward trend and surpassed the pre-pandemic Q1 level of 63 in Q1 2020. The figures show a faster increase than the national figures, which saw a modest rise from 321 (Q1 2023) to 328 (Q1 2024). The North West accounted for 21% of administrations in Great Britain, up from 18.7% last year. The most impacted sectors in the North West were business services with 12 cases, industrial manufacturing (ten cases) and professional services (nine cases).
https://www.insidermedia.com/news/north-west/administrations-reach-highest-level-since-pandemic
Obstacles to growth ‘falling away’ says Item Club
Growth is expected to accelerate next year as falling inflation, interest rates and costs encourage higher consumer spending, according to a key forecast. The EY Item Club has downgraded UK GDP this year from 0.9% to 0.7% as a lagging effect of last year’s short recession, but expects growth of 2% in 2025, up from 1.8% in January’s Winter Forecast. However, despite an improving inflationary outlook, the EY ITEM Club now expects fewer interest rate cuts and predicts base rate to end 2024 at 4.5% from 5.25% currently. This 75 basis points reduction compared with the 125bps of cuts predicted in January’s Winter Forecast and follows the Monetary Policy Committee’s messaging that rates may need to stay high for longer. The EY ITEM Club still anticipates that the first rate cut will come in June, amid expectations of a period of below-target inflation.
https://dailybusinessgroup.co.uk/2024/04/obstacles-to-growth-falling-away-says-item-club/
75% of Scottish businesses are concerned about inflationary costs over the next 12 months
Three-quarters of businesses in Scotland are concerned about inflationary pressures on costs and the impact this will have on them over the next 12 months. This was one of the key findings in the latest Family, Privately Owned and Owner-managed Business Survey by Armstrong Watson, which included a third of businesses who said they were ‘very concerned’ – somewhat higher than the national average of 21%. More Scottish businesses are also worried about cashflow, with 57% concerned about having enough to cover outgoings, compared with 49% across the country. Businesses north of the Border also cited increased costs as their main challenge impacting growth over the next three years (42%), though this is slightly lower than the national average of 44%. Staff recruitment and having sufficient funds to implement plans were also listed among the main challenges impacting growth for 39% and 33% of businesses respectively.
Surveys give contrasting verdict on SME trading
Owners of small and medium-sized businesses have had a strong first quarter of trading in 2024, according to a survey by NatWest that contradicts a poll in Scotland saying trading conditions had been poor. The survey by NatWest, trading as RBS north of the border, says companies offering services have done particularly well and that March marks the fifth successive rise in new business. Overall, the rate of output growth by small and medium-sized businesses in the first quarter of 2024 was the strongest since the same quarter last year. The survey is based on the responses of 850 companies based in Britain as part of a purchasing managers’ index researched by S&P Global. SMEs reported another sharp rise in their average cost burdens, especially those in the service economy, largely due to rising salary payments and transportation costs.
https://dailybusinessgroup.co.uk/2024/04/surveys-give-contrasting-verdict-on-sme-trading/