Business News Round Up (24/02/2023)
UK businesses in administration jump by 56% in 2022
Business failing in the UK last year increased from 857 in 2021 to 1340, research from law firm Shakespeare Martineau has found. Firms generally faced a tough year, with energy prices soaring due to the Ukrainian war and labour and raw material costs rising. Despite fears of a recession, a cost-of-living crisis and decreased consumer spending the number of bankruptcies remained 25% lower than in 2019 when Covid led to 1794 businesses failing, Shakespeare Martineau noted. “Numerous headwinds have become a new normal at this point and businesses are being pulled from every direction,” said Andy Taylor, partner at the British law firm. Furthermore, pressure from lenders is increasing and HMRC is taking a firmer stance, seeking to cap levels of liability for non-payment of tax.” Geographically, close to 20% (265) of the business closures occurred in greater London, followed closely by 16% (213) in the southeast. Businesses in Northern Ireland and Wales appeared to fare the best, combined the two countries made up only 5% of total closures, Shakespeare Martineau added.
A third of hospitality at risk of going under, despite record sales
Hospitality sales in 2022 topped pre-Covid levels but remain significantly behind 2019 in real terms due to inflation, leaving 32% of businesses at risk of failure in the next year. The UKHospitality Quarterly Tracker, in association with CGA, shows revenue was up 4.2% in 2022 compared to 2019, but down 13% in real terms when inflation is accounted for. Cost pressures, alongside ongoing labour shortages and Covid-19 debt, has left many hospitality businesses in a perilous position. The latest Q1 Hospitality Members Survey, ran jointly by industry1, showed that almost a third (32%) of businesses were at risk of failure in the next year. UKHospitality is urging the Chancellor to address the root causes of inflation in the Budget. It is calling for intervention in the energy market, Apprenticeship Levy reform and a new business rates multiplier to provide an immediate boost to the sector and prevent business failures, allowing those that survive to invest, employ, and grow. UKHospitality Chief Executive Kate Nicholls said: “These figures show the challenging position the sector is in. The demand from the public is quite clearly there, with revenue exceeding pre-Covid levels, but there is no way venues can take advantage of this demand as they drown amidst price rise after price rise.
UK needs one million new construction workers, as job vacancies hit record highs
The UK needs almost ONE MILLION new recruits in trades and construction over the next decade just to keep pace with demand, and with vacancies in the sector reaching record highs the industry is facing ‘a perfect storm’, new research has revealed. The new report has highlighted an “alarming” skills gap engulfing the construction sector over the coming 10 years, with a drastic need for new recruits in trades and construction by 2032. Of the 937,000 tradespeople needed to meet demand within the next decade, it said nearly a quarter of a million – 244,000 – must be qualified apprentices in order to prevent skills gaps worsening. Released during National Apprenticeship Week, the UK Trade Skills Index 2023 has been commissioned by tradesperson directory Checkatrade.com and undertaken by leading independent macro-economic research firm Capital Economics. The skills gap is being exacerbated by an ageing workforce, an exodus of EU workers post-Brexit, and the cost-of-living crisis.
Most active sectors for M&A detailed in report
The top three sectors for M&A activity in the North West have been revealed in a report by Experian Market IQ. Professional services was the most active sector, according to the information business, with a 2.6 per cent increase to 241 transactions. Manufacturing was in second place with the number of deals from the industry jumping by 26 per cent to 219. The most valuable sector, wholesale and retail, was the third most active, with 213 deals worth £3.3bn. Healthcare and hospitality both enjoyed a bumper year in terms of deal volume with more than 60 per cent increases, up to 110 and 40 deals, respectively. Meanwhile, M&A in the infocomms sector, traditionally high performing in the region, slowed last year in comparison to a prolific 2021, slipping from second to fourth position in terms of volume and down by 86 per cent in terms of value year on year.
https://www.insidermedia.com/news/north-west/most-active-sectors-for-ma-detailed-in-report