Business News Round Up (26/08/2022)
Public sector must kickstart productivity for UK economy, report finds
Public sector productivity holds a vital key to reversing the UK’s worsening economic outlook, yet there are concerns it has limited scope to perform that role in the light of budget pressures which would harm the quality of services in the longer term, according to a new report published by The Productivity Institute, based at Alliance Manchester Business School.The warning from Bart van Ark, professor of productivity studies at the University of Manchester and managing director of The Productivity Institute, comes amid fears that some organisations may have reached their limits to improve productivity through budget efficiency gains and budget cuts. The report, Making Public Sector Productivity Practical, outlines urgent recommendations for policymakers and public sector managers by focusing its endeavours to raise productivity on outcomes and identifying the key bottlenecks for improvement. The public sector accounts for about a fifth of UK GDP, so any improvements to its productivity levels significantly impacts the society more widely by improving the quality of services for everyone, and by providing more effective foundations for private enterprise and economy-wide productivity growth. These outcomes will ultimately help to reduce tax burdens and support fiscal responsibility.
Government offers grants to upskill Scots workforce
The new fund is designed to give SMEs flexible workforce development training opportunities to support inclusive economic growth.Thousands of businesses can now apply for grants of up to £15,000 to help retrain and boost the skills of their workers. The Scottish Government’s Flexible Workforce Development Fund (FWDF) provides workers in organisations of all sizes with access to training courses through local colleges, the Open University in Scotland, and Skills Development Scotland. Now entering its sixth year, the skills grants are open to organisations who pay the UK Apprenticeship Levy and small-to-medium size business (SMEs). The initiative plays a crucial role in Scotland’s National Strategy for Economic Transformation, which outlines how the Scottish Government will work to develop the best economic performance possible over the decade ahead. The aim of the fund is to support the Scottish Funding Council’s (SFC) strategic outcome of greater innovation in the economy, as well as the Scottish Government’s strategic priority of high-quality learning in a seamlessly connected system. Included in this is learning which prepares people well for the world of work and successful long-term careers, prioritising provision that meets known skills gaps in the economy.
UK car production rises for third month in a row but remains below pre-pandemic levels
UK car production increased for the third consecutive month in July but is still significantly below pre-pandemic levels, having been hampered by a decline in exports and supply chain problems. Latest figures from the Society of Motor Manufacturers and Traders (SMMT) show production output increased by 8.6% last month, as the sector starts to recover from shortages of key components – notably semiconductors. A total of 58,043 units were produced in July, but despite three months of growth, year-to-date production remained 16.5% below the same period in 2021. Over the year so far, 461,174 units have been produced, representing a shortfall of 91,187. The SMMT attributed the decline to supply chain shortages, structural changes, and weak exports, which fell -21.3% to 363,223 units. The crisis in Ukraine – a major hub for automotive parts – and lockdowns in China have contributed to the shortages of parts that have impacted the sector, reports Reuters. Mike Hawes, SMMT chief executive, welcomed the third consecutive month of growth, saying it provided “some hope that the supply chain issues blighting the sector may finally be starting to ease”.
Europe and UK dividend payments drive record quarterly high
Europe and the UK were key drivers in a record quarter for dividend payments, with payments reaching $544.8 billion (€544.58 billion) in Q2 2022, according to analysis by Janus Henderson. Europe and the UK saw outsized dividend growth, rising 28.7% and 29.3% on an underlying basis, respectively, with total dividends up 11.3% from a quarter prior. Financial services groups and German car makers were identified as key drivers within the European market. Switzerland and the Netherlands also registered all-time quarterly records. The $165.8 billion (€165.66 billion) total did not quite break the Q2 2018 record, thanks to the negative exchange-rate impact. With most European companies paying just once a year, Q2 2022 was the first time many businesses paid normal dividends since 2019. Ninety-four percent of firms either maintained or raised pay-outs in the last quarter, with underlying growth of 19.1% once factors such as the strength of the dollar were taken into account, analysis from Janus Henderson revealed. Surging cash flows from high oil prices meant oil producers contributed over two-fifths of the second quarter growth, while banks and other financials accounted for a little under two-fifths. Consumer discretionary companies were also key, Janus Henderson found.
https://www.funds-europe.com/news/europe-uk-dividend-payments-quarterly-high