Business News Round Up (31/03/2023)
UK economy avoids recession after growing in fourth quarter
Britain’s economy grew in the fourth quarter of last year, official data showed on Friday, with a jump of business at travel agents and state support for soaring energy bills helping the country avoid falling into recession. Economic output increased by 0.1% from the previous three months after shrinking by 0.1% in the third quarter, which was a smaller contraction than previously thought. The Office for National Statistics (ONS) had previously said the economy showed no growth in the fourth quarter. Two consecutive quarters of contraction would have represented a recession. Despite the improvement in the data, British economic output remained 0.6% below its level of late 2019, the only G7 economy not to have recovered from the COVID-19 pandemic. “The economy performed a little more strongly in the latter half of last year than previously estimated, with later data showing telecommunications, construction and manufacturing all faring better than initially thought,” ONS statistician Darren Morgan said. Britain’s dominant services sector rose by 0.1%, boosted by a nearly 11% jump for travel agents. Manufacturing grew by 0.5%, driven by the often erratic pharmaceutical sector, and construction grew by 1.3%.
https://www.reuters.com/world/uk/uk-economy-grows-q4-avoids-recession-ons-2023-03-31/
Business confidence continues to rise in Scotland
Business confidence in Scotland rose 24 points during March to 38%, according to the latest Business Barometer from Bank of Scotland Commercial Banking. Conducted ahead of the Spring Budget, surveyed companies in Scotland reported higher confidence in their own business prospects month-on-month, up 34 points at 41%. When taken alongside their optimism in the economy, up 15 points to 35%, this gives the headline confidence reading of 38%. Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (37%), entering new markets (35%) and investing in sustainability (30%). A net balance of 33% of businesses in the region expect to increase staff levels over the next year, up 34 points on last month. Overall, UK business confidence climbed 11 points to 32% in March, with firms reporting their highest confidence levels since May last year. On average, firms felt positive about their own trading prospects with 39% of firms expecting business activity to increase in the next 12 months – up eight points on last month – and 25% said they would increase staff levels by this time next year, up five points month-on-month.
https://www.insider.co.uk/news/business-confidence-continues-rise-scotland-29588566
NW business confidence rises as employers plan to expand workforce
Business confidence in the North West rose four points during March, to 35%, according to the latest Business Barometer from Lloyds Bank Commercial Banking. The poll was conducted between the March 1-15, ahead of the Chancellor’s Spring Budget on March 15. Companies in the North West reported lower confidence in their own business prospects month-on-month, down four points at 35%. When taken alongside their optimism in the economy, up 12 points to 35%, this gives a headline confidence reading of 35%. North West businesses identified their top target areas for growth in the next six months as investing in their team (36%), investing in sustainability (30%), and diversifying into new markets (29%). The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. A net balance of 45% of businesses in the region expect to increase staff levels over the next year, up 20 points on last month. Overall UK business confidence climbed 11 points to 32% in March, with firms reporting their highest confidence levels since May last year. On average, firms felt positive about their own trading prospects with 39% of firms expecting business activity to increase in the next 12 months, up eight points on last month and 25% said they would increase staff levels by this time next year, up five points month-on-month.
Scotland’s house price slump worst in UK
House prices fell 3.1% in March on a year ago – the seventh consecutive monthly decline and the largest annual fall since July 2009 – with Scotland showing the weakest performance. All regions saw a slowing in price growth in Q1, with most seeing small year-on-year falls, according to the latest data from Nationwide Building Society. The West Midlands was the strongest performing region, while Scotland saw prices fall 3.1% compared with a year ago, a sharp slowing from the 3.3% year-on-year increase in the previous quarter. Robert Gardner, Nationwide’s chief economist, said prices across the UK are 4.6% below their August peak, after taking account of seasonal effects. “The housing market reached a turning point last year as a result of the financial market turbulence which followed the mini-Budget” he said. “Since then, activity has remained subdued – the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40% below the level prevailing a year ago. It will be hard for the market to regain much momentum in the near term since consumer confidence remains weak and household budgets remain under pressure from high inflation.”
https://dailybusinessgroup.co.uk/2023/03/scotland-s-house-price-slump-worst-in-uk/