Business News Round Up (30/09/2022)
UK economy still below pre-pandemic size
Britain’s economy unexpectedly grew in the second quarter but was below its pre-pandemic peak, contrary to an earlier estimate that it had recovered, according to data that showed the scale of the challenge facing Britain’s new Prime Minister Liz Truss. The figures from the Office for National Statistics also showed Britain’s current account deficit – a big concern of foreign investors – was narrower than expected. The ONS said economic output rose by 0.2% in April through June, revised up from a previous reading of a 0.1% contraction. But the ONS revised down its estimate for Britain’s recovery from the Covid-19 pandemic, reflecting a bigger hit to the economy than first thought in 2020 when health lockdowns shut down businesses across the country. “The level of real GDP is now estimated to be 0.2% below where it was pre-coronavirus at Quarter 4 2019, downwardly revised from previous estimates of 0.6% above,” the ONS said. The ONS said it now believed Britain’s economy shrank by 11% in the year coronavirus hit the country, a more severe contraction than the previous estimate of a 9.8% hit.
Pound’s fall could boost overseas investment in ‘resilient’ Scottish commercial property market
The pound’s fall could see overseas investors’ share of investment in Scottish commercial property reach record levels. according to Knight Frank, after data for the first three quarters of the year showed they account for more than half of current volumes. The independent commercial property consultancy found that Investment volumes in Scottish commercial property rose by more than one-third – 37% – during the first nine months of 2022 compared to the same period last year, increasing from to £1.46 billion from £1.06 billion. Offices were the most popular asset type, accounting for just over one-third – £486 million – of total investment volumes. Investment in industrial property almost doubled from £157 million to £300 million, as interest levels in the sector continued to increase following the Covid-19 pandemic. Overseas investors remain the most active buyers of Scottish commercial property, representing 53% of investment at £779 million – a slight increase on their 50% share between Q1-Q3 2021. UK property companies increased their investment levels by 66%, from £312 million last year to £518 million during the same period of 2022.
Northern founders call for better support as funding gap cost UK economy £92bn
New research from Manchester-based venture capital firm Praetura Ventures shows the UK economy is losing out on a potential £92bn to GDP due to a shortfall in funding in the North. The new report – What’s Powering the Powerhouse? – finds that there is a lack of capital through equity funding, accelerators and support that amounts to £4.97bn in the North West, £3.8bn in Yorkshire and Humber and £1bn in the North East, totalling almost £10bn. Based on current output figures per business in 2022 in the North, the additional funding in each area would combine to create an additional £92bn in GDP. A survey of 250 founders in the North of England revealed that they are seeing this shortfall first-hand, with founders twice as likely to suggest their region lacked early-stage capital compared to founders in London and the South East. Businesses leaders in the North were also more concerned about their access to funding than any other region in the UK. The UK’s tech and life sciences sectors have seen record-breaking funding figures for early-stage companies throughout the last 18 months, but this is increasingly centred around the London.
Scottish businesses are ‘missing out on export opportunities’
Scottish businesses could be missing out on important export opportunities and the chance to grow on an international scale. That’s according to Alibaba Group, which surveyed more than 2,000 UK businesses, finding that almost half (47%) of Scottish respondents reckon exporting is a viable opportunity – but are concerned about the challenges of cross-border trade. The Chinese e-commerce group’s research also showed that the biggest perceived barrier to trading abroad is increased paperwork and customs rules (31%), followed by supply chain issues (27%) and concerns about payment security or late payments (27%). Meanwhile, a quarter of businesses highlighted shipping costs as another key obstacle to exporting overseas. Against this backdrop, 44% of Scottish businesses believe they would benefit from professional advice from an export advisor to help them expand and succeed on the global stage. Two fifths stated that more country-specific exporting information would enable them to export overseas, while 39% said more access to overseas marketing information would help. Among the Scottish companies that do currently export overseas, 86% said they expect export sales to increase in the next 12 months. Nearly half (49%) are conducting more international sales online because it is more cost effective, while 47% have made the switch because it removes the need to travel.
https://www.insider.co.uk/news/scottish-businesses-missing-out-export-28112600