Business Information
UK businesses secure record amount through invoice finance. The Asset Based Finance Association (ABFA) has reported that the total amount of lending UK businesses secured through invoice finance has passed the £20 billion barrier for the first time, hitting £20.3 billion this year - up 5% from last year. Overall, the amount of Invoice Finance and Asset Based Lending secured by UK businesses has risen by over a quarter (27%) over the last five years, up from £16 billion in 2011/12. The ABFA adds that the record high has been primarily driven by an 18% increase in the amount drawn down by the UK’s largest businesses (with a turnover above £100 million), up from £5.8 billion in funding last year to £6.9 billion this year. To read the ABFA's news release go to http://www.abfa.org.uk/news/125/UK-businesses-secure-record-amount-through-invoice-finance-breaks-GBP-20bn-barrier-for-first-time.
Seven once dominant US retailers that are now on the verge of bankruptcy. An article in Business Insider UK has reported that, according to a Fitch Ratings report, seven major US retailers have a high risk of going bankrupt within the next two years. The at-risk companies include: Sears Holdings, Claire's Stores, True Religion Apparel, Nine West Holdings, Rue21, 99 Cents Only Stores, and Nebraska Book Company. According to the report, retailers are almost three times as likely to be liquidated after filing for bankruptcy than companies in other industries. To read Business Insiders' article go to http://www.businessinsider.com/retailers-at-high-risk-of-going-bankrupt-2016-10.
Global trade growth slows to financial crisis levels. GTR (Global Trade Review) has published an article which reports that according to the WTO, global trade is growing at the slowest pace since the financial crisis, with the WTO revising its forecast dramatically down for 2016. World trade is now expected to grow at just below 1.7% this year (down from the 2.8% - the WTO forecast in April). Falling import demand and slow economic growth in major economies such as Brazil, China and North America are to blame, according to the WTO, which has also revised down its forecast for next year. For 2017, mindful of the volatility of the global economic picture, the WTO has been less exact with its forecast, predicting trade growth of between 1.8% and 3.1%, down from the 3.6% originally mooted. To read GTR's article go to http://www.gtreview.com/news/global/global-trade-growth-slows-to-financial-crisis-levels/.
Only 5% of UK SMEs have plans to start exporting in the next five years. A new report, 'Thinking Global: The route to UK exporting success', commissioned by World First (conducted by the Centre for Economics & Business Research) has found that only 5% of UK SMEs have plans to start exporting in the next five years. The analysis also showed that the UK ranks in the bottom five across European economies when it comes to the share of SMEs among exporters. Between 2008 and 2015, UK exports grew by just 3% (to $486 billion). In comparison, had UK exports grown in line with the global average, they would have been 19% higher ($564 billion in 2014). Had they grown at the rate of German UK exports, the figure would have been 7% higher (or $508 billion). To read World First's news release go to https://www.worldfirst.com/uk/blog/international-business/uk-sme-export-shortfall/.
New research finds huge liquidity imbalance, with billions in cash held by a small number of UK companies. New research from Grant Thornton has found that there is a huge imbalance in the liquidity of the UK economy and that, despite a 14% increase in cash on hand since 2010, the majority of this is held by a small number of companies. The study, 'The UK's cash conundrum', found that although cash reserves are up by 5% from last year, and 14% from five years ago, the balance is not evenly distributed to optimise growth across the UK economy. Just 10 companies hold 30% of the £244 billion - the equivalent to 13.5% of the UK GDP in 2015. To read Grant Thornton's news release go to http://www.grantthornton.co.uk/en/news-centre/new-research-finds-huge-liquidity-imbalance-with-billions-in-cash-held-by-a-small-number-of-uk-companies/.
SME investment in export activity almost doubles in past year. According to the latest SME Confidence Tracker from Bibby Financial Services (BFS), the number of UK SMEs investing in trading overseas has almost doubled over the past 12 months; findings reveal that 15% of SMEs invested in export activity in Q3 this year, compared with just 8% in Q3 2015, signalling an increasing appetite amongst smaller businesses to shrug-off Brexit concerns and search for growth beyond their domestic market. Research also reveals that over a third (37%) of SMEs say that the UK’s vote to leave the EU has not impacted their businesses. A further 37% believe it’s too early to tell. To read BFS' news release go to https://www.bibbyfinancialservices.com/press/news/2016/sme-investment-in-export-activity-almost-doubles-in-past-year.
Over 11,000 new Irish start-ups formed in Quarter 3 this year. According to latest data from Vision-net.ie, Irish start-ups remained strong between July and September this year and while insolvencies for the quarter were up on 2015, the figure for the year as a whole was more encouraging. Finance was one of Ireland’s fastest growing industries for new company start-ups during the quarter with 758 being formed - up 17% on Q3-2015 (647). Professional services remained the most popular industry for new companies and accounted for 18% of these, with finance and wholesale & retail in second and third place. While 232 insolvencies were recorded for the period 1st July to 27th September this year - up 14% on the same period in 2015 (204) - figures for the first 9 months of the year revealed that insolvencies were down 5% on the same period in 2015. For the latest data go to http://www.businessbarometer.ie/index/.
UK manufacturing confidence rallies as services sector stalls. According to the latest Business Trends Report by BDO, four months after the Brexit vote the UK’s two-speed economy appears to be undergoing a role reversal. After a difficult two years, manufacturers are feeling more bullish about their economic outlook; the weakness of sterling has made UK manufacturing much more competitive in overseas markets, giving an immediate boost to exports and order books. In contrast, the short-term confidence of the services sector has been dented by lingering uncertainty. To read BDO's news release go to https://www.bdo.co.uk/en-gb/news/2016/manufacturing-confidence-rallies.
BCC Quarterly Economic Survey: Mixed picture emerges post-referendum. The British Chambers of Commerce's (BCC) latest Quarterly Economic Survey shows a mixed picture, with an improved short-term performance in the manufacturing sector set against a further slowdown in growth in the services sector. The survey – the first covering the period after the EU referendum – shows that manufacturers enjoyed improved domestic and export sales compared with the previous quarter, with some benefitting from Sterling's recent fall. Meanwhile, the balance of service sector firms reporting improved domestic and export sales was at its lowest level seen since 2012. The survey's results suggest that the UK economy is still growing - albeit at a lower level than before the referendum - and supports the BCC's forecast for growth of 1% in 2017. To read the BCC's news release go to http://www.britishchambers.org.uk/press-office/press-releases/bcc-quarterly-economic-survey-mixed-picture-emerges-post-referendum.html.
Brexit keeps UK CFOs on the defensive. According to Deloitte’s latest CFO Survey, despite an easing of some negative effects, risk appetite among the CFOs of the UK’s largest businesses remains subdued following the EU referendum. 88% of the CFOs surveyed say the level of uncertainty facing their business is above normal, high or very high, down from 92% in Q2 but still the second highest since Q4 2012. 82% say now is a bad time to take risk onto their balance sheet, down from 95% in Q2 but still the second highest level since Q4 2011. 47% say they are less optimistic about the financial prospects for their company, down from 73% in Q2. 24% of CFOs say they expect corporate revenues to decrease over the next 12 months, down from 63% in Q2, while 44% expect operating margins to decrease, down from 70%. To read Deloitte's news release go to http://www2.deloitte.com/uk/en/pages/press-releases/articles/brexit-keeps-cfos-on-defensive.html.
Third consecutive fall for overall UK economic confidence. According to preliminary results from the Chartered Institute of Credit Management’s (CICM) latest quarterly barometer, confidence in the UK’s economy has fallen again, driven primarily by a steady decline in manufacturing which is down 4% to 54.9. The results go against recent economic data as well as a survey prior to the referendum vote that concluded half of all credit professionals believed a Brexit vote would have little or no impact on their business. All favourable factors, credit sales, new credit applications and the order book, increased in Q1 and Q2, however Q3’s preliminary findings show all three have fallen. Four of the seven unfavourable factors have also worsened. To read the CICM's news release go to http://www.cicm.com/third-consecutive-fall-overall-economic-confidence/.
UK High Street fashion sales record the second worse set of figures in 2016. According to figures released by BDO, last month’s unexpected heatwave sparked chaos among fashion retailers, prompting the second worse set of sales figures for the whole of 2016. High street fashion sales recorded by BDO’s September High Street Sales Tracker (HSST) recorded a year-on-year drop of 5.9% - beaten only by April’s like-for-like fall of 9.2%. Sophie Michael, Head of Retail and Wholesale at BDO said September was always going to be tough when compared to a strong September 2015 (up 2.8%), but retailers should take the erratic weather as a lesson in the importance of flexibility. To read BDO's news release go to https://www.bdo.co.uk/en-gb/news/2016/hsst-scorching-september.
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