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UK retailers have experienced yet another year of dire Christmas trading. According to new research from Begbies Traynor, which tracked levels of corporate distress among UK businesses between 1 October and 17 December 2015, UK retailers have experienced yet another year of dire Christmas trading, with 24,737 retailers across the country now suffering ‘significant’ financial distress. Begbies Traynor suggests that the figures, which are marginally up compared to the same period last year (Q4 2014: 24,251), are even more concerning given today’s low inflationary environment and indicate that retailers’ drastic discounting over the past month has failed to draw in the crowds. The data shows that food retailers have been hit hardest, with an increase in ‘significant’ financial distress of 11% from 3,819 last year to 4,226 this quarter, as the supermarket price war continues to push margins to rock bottom levels and as families leave their big Christmas shop this year to the eleventh hour. To read Begbies Traynor's news release go to http://www.begbies-traynorgroup.com/news/business-health-statistics/desperate-uk-retailers-running-out-of-time-to-rescue-christmas-sales-slump.
Over 100,000 UK businesses owed money by insolvent companies and individuals in 2015. According to new research by R3, over 100,000 UK businesses were owed money by suppliers or customers entering an insolvency procedure during the last year. In total, 113,000 businesses, about 6% of all UK businesses, were creditors in an insolvency procedure in 2015. Medium-sized businesses – those employing 51-250 people – were most likely to have been exposed to another firm or individual’s insolvency, with one-in-seven (14%) of these businesses owed money by an insolvent individual or company. Phillip Sykes, R3 president commented: “Businesses need to take preventative measures and properly asses risks before trading with individuals or other firms. Doing so will minimise the chance of being exposed to others’ insolvencies in the first place.” To read R3's news release go to https://www.r3.org.uk/index.cfm?page=1114&element=26210&refpage=1008.
UK retail growth unlikely to improve in 2016. The KPMG/Ipsos Retail Think Tank (RTT) warns that retail sales growth is set to edge back in 2016 from 1.8% to around 1.7% as consumers look to other sectors in which to spend their disposable income. However, overall, the RTT believes there is plenty to be positive about going into next year to support an increase in spend and spending power by UK consumers, but it remains to be seen as to how much retail is going to benefit from this. “While 2016 is likely to be a much more positive year in growth terms, not all retailers and sectors will benefit,” explained Maureen Hinton at Conlumino. “An improving economy will not solve the problems of how to deal with the fundamental changes in how consumers shop, and the rising costs of meeting their expectations. ”As such, Dr Tim Denison noted that, “2016 will be a tricky year to get the balance right between cost control and investment. Retailers will need to keep on their toes." To read KPMG's news release go to https://home.kpmg.com/uk/en/home/media/press-releases/2015/12/retail-growth-unlikely-to-improve-in-2016-warns-kpmg-ipsos-retail-think-thank.html.
Weak trade and manufacturing figures nudge down UK growth forecast. The British Chambers of Commerce (BCC) has advised that it has downgraded its UK GDP growth forecast, from 2.6% to 2.4% in 2015, from 2.7% to 2.5% in 2016, and from 2.7% to 2.5% in 2017. The downgrade is mainly due to weaker than expected trade figures and a worse than predicted manufacturing performance, largely as a result of falling global prospects in recent months. John Longworth, Director General of the British Chambers of Commerce, said: “Official data is starting to reflect what our Quarterly Economic Survey has been showing all year – that our persistently weak trade performance and current account balance are impacting our overall growth. Similarly, the manufacturing sector has been hit badly by falling global prospects, tipping an earlier prediction of growth in 2015 to an expected contraction." To read the BCC's news release go to http://www.britishchambers.org.uk/press-office/press-releases/bcc-weak-trade-and-manufacturing-figures-nudge-down-uk-growth-forecast.html.
A positive outlook for the UK construction industry in 2016. Richard Threlfall, KPMG’s Head of Infrastructure, Building and Construction, has predicted a positive outlook for the construction industry in 2016. He advised: “2016 will be a good year for the construction industry. Tier 1s will stabilise, labour supply and price pressures will start to ease, and the industry should be able to start focusing on securing steady growth in what will be a strong market." In particular, he noted "Companies that have real specialism will be in hot demand, particularly those operating with highly skilled labour which will remain in short supply, for example in electrical engineering." To read KPMG's news release go to https://home.kpmg.com/uk/en/home/media/press-releases/2015/12/2016-is-the-year-for-the-construction-industry-to-invest.html.
UK manufacturing export orders improve but remain a concern. According to the latest CBI Industrial Trends Survey, the UK’s manufacturers have seen an improvement in total and export orders in December, but still expect their output to contract mildly over the coming three months. The survey of 473 manufacturers saw the strongest total orders for three months and exports performed better when compared with recent months - with 14 out of 18 sub-sectors improving - but exports remaining a drag on overall orders. Rain Newton-Smith, CBI Director of Economics, said: “Manufacturers are still having a tough time of it with output slipping and exports remaining a weak spot in spite of an improvement at the end of the year. . . But there is a pick-up in orders from previous months which could be a sign of light at the end of the tunnel." To read the CBI's news release go to http://news.cbi.org.uk/news/manufacturing-export-orders-improve-but-remain-a-concern-cbi/.
Deloitte's UK CFO Survey: A cautious start to 2016. According to Deloitte’s latest quarterly CFO Survey, Chief Financial Officers (CFOs) of the UK’s largest companies entered 2016 in a mood of caution and with a strong focus on cost control. The survey also finds levels of support among CFOs for the UK remaining in the EU have narrowed from 74% to 62%. Asked to rate how optimistic they are about the prospects for their company compared to three months ago, 30% of CFOs say they are less optimistic (up from 20% in Q2), and just 12% say they are more optimistic, (down from 36% six months ago). This is the third consecutive quarter that corporate sentiment has fallen and it is now at its lowest level since Q2 2012. To read Deloitte's news release go to http://www2.deloitte.com/uk/en/pages/press-releases/articles/deloitte-cfo-survey-a-cautious-start-to-2016.html.
Number of tech businesses in UK grows 31% in 5 years. According to the latest KPMG/Markit Tech Monitor UK Survey, the number of tech-related enterprises in the UK private sector has risen by 31% since 2010 - a net gain of approximately 45,000 enterprises over a five year period. The growth of tech sector enterprises is double that of all private sector enterprises over the same period (16%). Reading has taken the top spot of all tech clusters in the UK, as more than one in five enterprises in the area are tech sector firms (22% ) - a proportion significantly higher than the national average (8%). To read KPMG's news release go to https://home.kpmg.com/uk/en/home/media/press-releases/2015/12/number-of-tech-businesses-in-uk-grows-31--in-5-years.html.
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