Business News Round Up (26/07/2021)
Flash UK PMI slides to four-month low as Covid-19 wave dampens economic growth
July saw the UK economy’s recent growth spurt hit by a rising wave of virus infections, which subdued customer demand, disrupted supply chains, and caused widespread staff shortages, and also cast a darkening shadow over the outlook. The IHS Markit/CIPS flash composite PMI output index, covering both services and manufacturing, fell further from its all-time high of 62.9 in May, down sharply from 62.2 in June to 57.7 in July. Although the PMI remains elevated by historical standards, indicating that business activity continued to grow strongly, the decline in the index means the rate of expansion slowed to the weakest since March While growth was buoyed by the easing of lockdown restrictions to the lowest since the pandemic began, July also saw widespread reports of virus-related factors subduing customer demand, disrupting supply chains, and causing widespread staff shortages.
Scottish SMEs ‘more confident’ than English counterparts about the economy reopening
Scotland’s small to medium-sized enterprises (SMEs) are more confident than their English counterparts about the economy reopening. PayPal polled more than 1,000 SMEs across the UK and found that 60% of Scots are more bullish, compared to 51% down south. Despite 44% of Scotland’s SMEs saying that spending on the high street will never recover, optimism is high among business owners, with more than half (58%) planning to prioritise local customers over international sales. With 65% of Scottish SMEs expecting the majority of consumers to continue shopping online, despite the lockdown restrictions easing, businesses plan to continue investing in digitalisation. More than one third (35%) will continue using social media to promote and sell products and services and one in four (21%) plans on implementing new digital payments to facilitate the customer experience.
https://www.insider.co.uk/news/scottish-smes-more-confident-english-24603365
Fears raised as Manchester faces looming tech skills ‘crisis’
Manchester is facing a growing tech skills shortage crisis – despite recently having been named the sector’s fastest-growing city in the whole of Europe. The city was also recently listed as one of the best in the world to start and scale a fintech firm, with investment increasing by 277% in the past year. But according to Alex Bright, founder of PACC, a candidate profiling and cultural compatibility consultancy, the city’s tech sector is in a perilous position. He said: “The demand for developers and programmers is unprecedented. There are a number of reasons. The pandemic led many companies to pivot to online trading. Many new e-tailing businesses have emerged, and the sector is awash with funding and investment, which has contributed to the skills shortage as companies grow.” Although Mr Bright welcomed the many central and local government initiatives aimed at addressing the skills gap, he said companies need to find more immediate solutions.
https://www.business-live.co.uk/technology/fears-raised-manchester-faces-looming-21129444
Scottish business optimism rises, but overheads spiral
Business optimism amongst Scottish smaller firms is at its strongest since the summer of 2015. The latest Federation of Small Businesses (FSB) figures show the average Scottish business is now more hopeful about prospects than its UK-wide equivalent for the first time since the third quarter of 2020. Its Scottish small business confidence index rose to +20.5 points this summer, from +18.8 points in the first quarter of the year. The equivalent UK-wide figure fell to +18.6 points from +27.3 points in the first three months of 2021. The index measures whether firms believe trading conditions will improve or deteriorate over the next three months. However, almost two thirds (64%) of Scottish firms reported in an increase in running costs in comparison to this time last year, while only 8% said their overheads had decreased. More Scottish firms also believe their profits will fall over the next three months, than those who think they will increase.
https://www.insider.co.uk/news/scottish-business-optimism-rises-overheads-24602529