Business Information
The pace of UK retailers shutting up shop drops to the lowest level for five years.  New PwC research (compiled by the Local Data Company (LDC)) has shown that in the first six months of 2015, 2,634 shops closed on the UK high streets - a rate of 14 stores a day. This is the lowest closure rate in five years and also represents the lowest levels of churn on the high street since 2011. However, although these figures reflect a less hostile environment for retailers, the PwC/LDC study also shows that 2,634 outlets closed in a six-month period compared to 2,197 openings - a net reduction of 437 shops. This represents a slight widening of the gap when compared to the previous year. To read PWC's news release go to   http://pwc.blogs.com/press_room/2015/10/pace-of-retailers-shutting-up-shop-plummets-to-lowest-level-for-five-years-says-pwc-and-the-local-da.html.
Singapore tops the Global Competitiveness rankings, with the UK in tenth position. The World Economic Forum has published its latest Global Competitiveness Index and has announced that, for the seventh consecutive year, first place goes to Switzerland. Singapore remains in 2nd place, followed by the US in 3rd place. Germany improves by one place to 4th and the Netherlands returns to the 5th place it held three years ago. Japan (6th) and Hong Kong SAR (7th) follow, both stable. Finland falls to 8th place – its lowest position ever – followed by Sweden (9th). The UK is in tenth position. To read the WEF's news release and see the full rankings go to https://agenda.weforum.org/news/new-normal-productivity-spells-uncertainty-for-global-economy/.
Stability may finally be returning to the struggling UK grocery sector. According to Begbies Traynor's Red Flag Alert research for Q3 2015, which monitors the financial health of UK companies, UK food retailers experienced their first quarterly decline in ‘Significant’ financial distress in over two years, decreasing 5% to 5,002 struggling businesses over the past three months (Q2 2015: 5,258). The last time that UK food retailers saw any improvement in financial distress was during Q2 2013 when there were 2,428 failing businesses in the sector; 51% fewer than the number, "struggling to make ends meet today." To read Begbies Traynor's news release go to http://www.begbies-traynorgroup.com/news/business-health-statistics/uk-grocery-industry-fights-back-with-first-signs-of-sector-recovery.
A robust approach to late payment may win respect rather than lose customers. Following the announcement by Tesco that it plans to cut its payment terms to 14 days for suppliers that are small businesses, Lovetts is urging SMEs to use the Tesco initiative as a signal that a more robust approach to late payment may win them respect rather than lose custom. Currently, according to Lovetts’ figures, firms spend an average of 99 days waiting for an invoice to be paid before instructing their solicitor to issue a Letter Before Action threatening legal action. Charles Wilson, Chairman of Lovetts, commented: "We urge businesses to act early on late payments. . . In over 8 out of 10 cases, a simple warning of legal action is enough and can cost businesses less than a cup of coffee." To read Lovetts' news release go to https://www.lovetts.co.uk/news/Lovetts-welcome-Tesco-move-to-cut-payment-terms-to-14-days.aspx.
UK business confidence recalibrates but is still well above the global average.  New research from Grant Thornton’s International Business Report (IBR), a survey of 2,500+ business leaders in 36 economies, reveals that UK business confidence dropped slightly in the third quarter of this year to 67%. This follows a post-election bounce in Q2, from 65% to 79%, following the outcome of the General Election. However, despite the quarterly decline, the UK remains one of the survey's most confident economies. Globally, average business confidence dropped to 38% (from 45% in the previous quarter), largely triggered by a slowdown of the Chinese economy, which had a knock-on effect on many of its key trading partners. To read Grant Thornton's news release go to http://www.grantthornton.co.uk/en/news-centre/uk-business-confidence-recalibrates-following-post-election-boost-yet-optimism-still-well-above-global-average/.
One-in-five businesses say they would be put in financial difficulty by an interest rate rise. According to the latest Business Distress Index from R3, nearly one-in-five businesses (19%) say they would be put in financial difficulty by an interest rate rise. Compared to last year, this is slightly fewer businesses (2014: 22%), but, according Phillip Sykes, President of R3, still represents, "a substantial amount of businesses and jobs that could be put in difficulty.” The survey also found that 4% of businesses – equivalent to 77,000 companies – say they would struggle to repay their debts if interest rates were to rise. To read R3's news release go to https://www.r3.org.uk/index.cfm?page=1114&element=25143&refpage=1008.
UK economy is resilient heading into 2016. According to the latest Business Trends Report by BDO, businesses expect growth to continue into 2016. BDO’s Optimism Index increased to 102.2 from 101.9 this month, the first uptick in confidence since February this year. This confidence is underpinned by continuing low inflation rates, which are helping manufacturers in particular. But BDO also warns that the IMF last week warned that the risk of a global recession is still on the horizon, and that UK businesses cannot afford to be complacent. To read BDO's news release go to http://www.bdo.co.uk/press/uk-economy-resilient-heading-into-2016.
The IMF predicts that the recovery will strengthen in advanced economies, but prospects remain uneven. The IMF has released its latest World Economic Outlook (WEO) update which advises that although global growth in 2015 is now projected at 3.1% - 0.3 percentage point lower than in 2014 - prospects across the main countries and regions remain uneven with growth in advanced economies expected to pick up slightly, but declines in emerging market and developing economies. In 2016, global activity is projected to gather some pace, with strengthening recovery in advanced economies and improvements in emerging and developing economies. In particular, growth in countries in economic distress in 2015 (including Brazil, Russia, and some countries in Latin America and in the Middle East), is projected to be higher next year. To view the Update on the IMF's website go to http://www.imf.org/external/pubs/ft/weo/2015/02/.
UK SMEs account for 47.2% of private sector turnover. The Forum of Private Business (FPB) has published its latest analysis of Office of National Statistics figures and has reported that UK SMEs have a collective turnover of £1,753,900 and generate 47.2% of private sector turnover (previously 46.8%). Overall, there are now 5.4 million businesses in the UK (compared to 3.5 million in 2000),  76% of which have no employees. To read the FPB's news release go to https://www.fpb.org/press/october-2015/annual-business-population-statistics-2015.
About this Issue's Sponsor: Atradius
With a presence in over 50 countries worldwide, Atradius’ reach stretches all around the globe; and the challenges, opportunities and competition of international trade is something that we talk to our customers and brokers about every day. However, this autumn we have been talking about international competition of a different kind. With our UK head offices just a stone’s throw from Wales Millennium stadium, the Rugby World Cup has been very much on our mind and so we have challenged our broker partners to a rugby themed tournament of our own, testing knowledge not only about rugby, but also about the 20 nations taking part. The Atradius Around the World Quiz has captured everyone’s attention and whilst participants have certainly enjoyed the ‘fun’ aspect, there has also been an opportunity to think about where international competition fits in to our own world.
Atradius has access to credit information on 200 million companies worldwide and supports businesses to manage the risks associated with trading overseas. For a company selling goods or services knowledge about trading partners is vital and that is one of the ways that we as Credit Insurers can help. At Atradius we have been supporting exporters for over 90 years and our worldwide team of experts is on hand to help businesses of all sizes and in all sectors.
The Around the World with Atradius campaign has helped to remind us of the opportunities that international trade presents and that Atradius is the perfect partner to help ensure that opportunity is converted into success.
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