Business News Round Up (25/08/2022)
Scottish businesses see opportunities in Levelling Up agenda
New research finds that Scotland’s business community sees Levelling Up and boosting investment in Scotland as vitally important. The policy agenda, the most recent take on decades of debate about how to rebalance the UK economy away from an overheated London and South East, had been a major focus of the outgoing leader Boris Johnson. New research from Grant Thornton UK LLP’s latest Business Outlook Tracker* shows his successor that the vast majority of mid-sized businesses in Scotland believe that the Levelling Up agenda will be beneficial to local business (88%) – 15% higher than the national average of 73%. The results also show recognition that the Levelling Up agenda cannot be delivered by one sector alone and that UK Plc has a key role to play in its success. Over four in five (86%) of Scotland based respondents see companies like theirs playing an important role in the Levelling Up agenda, significantly higher than the national average (73%). The results also reflect which of the government’s 12 Levelling Up missions are most important to local businesses. Each mission was identified as one of the top three priorities in a region, at least once, demonstrating the differing issues needing to be addressed across the UK.
Manufacturing expert opening base in Manchester’s innovation district
A leader in UK manufacturing technology innovation is to open offices in the centre of Manchester, which could help the region close its manufacturing output gap of £500m. The High Value Manufacturing Catapult (HVM Catapult), as well as deep tech innovation organisation, CPI, are taking space in Bruntwood SciTech’s Circle Square, close to the University of Manchester campus. HVM Catapult is the go-to place for manufacturing technology innovation, with seven centres across the country, covering the full range of manufacturing technology capabilities, from materials to biologics and from automation to virtual reality, from additive manufacturing to metal forming. It offers open access to the latest industrial scale equipment, leading expertise, and an environment of collaboration between industry, academia, and government. It works with businesses of all sizes and all sectors to help turn ideas into commercial applications. The existing manufacturing business base in Greater Manchester is highly productive by UK standards. But the overall output gap for the region, just in terms of manufacturing, is approximately £500m per annum. The HVM Catapult can advise and incentivise businesses to invest in innovation and help develop their workforces to address this annual output gap. This could include helping firms grow their existing business base, particularly family run small and medium-sized enterprises, by encouraging more investment in research and development which supports access into new markets and more complex supply chains.
Scottish SMEs report revenue growth, but brace for turbulent times ahead
Scottish small and medium-sized enterprises (SMEs) have reported revenues rising by 11.4% on average in the second quarter year-on-year, with 54% expecting turnovers to increase further by the end of the third quarter. The latest Barclays SME Barometer also showed that while 77% fear the impact of recession, 78% are neutral or optimistic about their own business’ prospects. The report takes in data from the billions of merchant transactions processed by Barclaycard Payments, combined with a quarterly YouGov survey of 577 SME leaders – including 56 businesses polled in Scotland. More than half (57%) of SMEs in Scotland plan to invest in their business over the next 12 months, turning to recruitment (34%), marketing (30%) and purchasing new equipment or technology (21%) to shore up their operations. More than a third (34%) have already increased their number of full-time employees during the second quarter. Barclaycard Payments data showed an annual rise of 19.4% in the value and 21.5% in the volume of payments made to SMEs in Scotland between April and June this year. More than two thirds (63%) of Scottish SMEs saw revenue increases in the second quarter of this year against 2021, compared to 55 per cent UK-wide. A similar number (65%) of small businesses also expect further gains this quarter, despite concerns about the wider economy.
https://www.insider.co.uk/news/scottish-smes-report-revenue-growth-27827726
Chamber of Commerce calls for COVID style support for businesses over energy costs
The British Chambers of Commerce (BCC) has written to the Prime Minister, Chancellor of the Exchequer and both leadership candidates for the Conservative party proposing a comprehensive five-point plan to provide vital support to UK businesses. The BCC five-point plan to support businesses says that Ofgem should be given more power to strengthen regulation of the energy market for businesses. They say that there should be a temporary cut in VAT to 5% to reduce energy costs for businesses and calls on Covid-style support by introducing Government Emergency Energy Grant for SMEs. The cost-of-living crisis and the cost-of-doing business crisis are two sides of the same coin. The Bank of England’s projections of a recession and consumer confidence reported by GfK at a 50-year low are clear signs that the Government is running out of time to offer businesses and households the support they need. These projections are not a surprise to the BCC or the business community. Over the last 18 months, BCC research has shown unprecedented inflationary pressures on businesses, with two thirds of firms in Q2 2022 expecting further price rises. Energy bills, raw materials, and labour costs are all cited as the top drivers of price rises.