Business News Round Up (22/09/2022)
Manchester among most expensive areas for commercial rent in the UK
The UK is one of the biggest European commercial real estate markets, however, many businesses are unable to keep up with the increasing commercial rents. In fact, data compiled by the Local Data Company revealed a staggering 17,219 retail shops closed last year – equal to 47 closures a day. Cities in particular have struggled with rising rent costs and following effects of the pandemic in comparison to commuter towns and villages where commercial rent is often lower. Analysing three types of commercial rent, retail, prime office and industrial, the research has shown that London has come out on top for all three, with the prices reaching as high as £2,150 per square foot per year for retail space. However, Manchester is not far behind areas of London within the retail sector, as some plots reach as high as £220 per square foot per year – just £20 less than City of London. But areas in the midlands are also seeing high commercial costs in comparison to the rest of the country, with retail spaces in Birmingham going for £180 per square foot.
Manufacturers plead for help as growth forecasts are slashed for next year
Manufacturers have called for emergency Government help after slashing growth forecasts for next year amid “gathering storm clouds” for industry. Make UK, which represents manufacturing companies, said a survey of firms suggested growth in the sector of just 0.6% in 2023, down from 1.7% as recently as June. The manufacturers’ organisation has cut its forecast for economic growth from 3.6% this year to 0.3% in 2023. The organisation called on the Government to bring forward a “shock and awe” package of policy measures in its mini-Budget on Friday in line with those seen during the worst points of the pandemic to help protect viable companies and avert significant job losses. As well as help with energy costs, Make UK wants measures to aid cashflow, provide greater access to labour and encourage investment, especially in energy efficiency technologies. And if companies are asked to stop production or reduce work times to help with the energy crisis, the Government should also introduce an ‘energy furlough scheme’ similar to that introduced during the pandemic, it said.
Resilient North West firms top growth positivity table
Resilient North West businesses are expecting to grow or maintain turnover during the next 12 months despite the emerging economic challenges and cost increases, according to new research. The research, conducted by Opinium on behalf of Paragon Bank, found that despite wider economic challenges, 55 per cent of SMEs in the region are predicting turnover growth. This is the highest level in Great Britain – with 23 per cent anticipating to maintain current levels. The nationwide survey of more than 1,000 SMEs found that nationally 43 per cent are expected to record growth during the next 12 months. A further 30 per cent are expecting no change. Nearly three in ten North West businesses (28 per cent) expect turnover growth of up to 5 per cent, with 20 per cent forecasting growth of between 5 per cent and 10 per cent. A further 8 per cent expect growth of above 10 per cent during the period. The predicted growth for North West SMEs is mirrored by the region’s investment plans, with 52 per cent of firms set to increase investment in their business during the next 12 months – compared with only 18 per cent reducing investment.
https://www.insidermedia.com/news/north-west/resilient-north-west-firms-top-growth-positivity-table
UK Government to pick up half the tab for business energy bills
Businesses across Great Britain will see the UK Government pick up nearly half of their soaring energy bills. The wholesale cost of gas and electricity will be slashed for companies under a scheme which will run for six months, starting in October. The wholesale price paid by non-domestic customers, which include schools and charities, will be capped. The “supported wholesale price” is expected to be £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas. This is around half the expected wholesale price on the open market, and equivalent to the cap on household energy bills that will be set this October and run for two years. Chancellor Kwasi Kwarteng said: “We have stepped in to stop businesses collapsing, protect jobs and limit inflation. And with our plans to boost home-grown energy supply, we will bring security to the sector, growth to the economy and secure a better deal for consumers.” The scheme will apply to fixed contracts agreed on or after 1 April this year, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October to 31 March. The savings will be first seen in October bills, which are typically received in November.
https://www.insider.co.uk/news/uk-government-pick-up-half-28043339