Job market fears – business news 4 February 2021.
James Salmon, Operations Director.
Two in three fear worse job market, the Service Sector slips, loan liabilities a risk for SME owners, covid-19, market and lots more business news.
Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.
Two in three fear worse job market in 2021
Research by skills development firm City & Guilds Group suggests that 65% of people expect the job market to be worse in 2021 than it was in 2020.
Analysis shows that while job postings were up 57% year-on-year at the start of March 2020, they had slipped 54% year-on-year by April 5.
The survey, conducted alongside analytics software company Burning Glass Technologies, shows that one in 10 respondents are looking to change jobs because the coronavirus pandemic has fundamentally altered their current role.
The poll saw 32% say they do not know where their current skill-set might be useful, while 34% were concerned about starting over again. Just over 20% said they lacked knowledge of other sectors, while 19% expressed an overall lack of confidence.
Services Sector Slips
Activity in the services sector fell in January, with pressures stemming from the latest coronavirus lock-down driving the steepest contraction since May. The IHS Markit/CIPS purchasing managers’ index (PMI) fell from 49.4 to 39.5 last month, with this stronger than the 38.8 economists had forecast but short of the 50 or higher reading which signifies growth.
Tim Moore, economics director at IHS Markit, said that although service providers “experienced a steep downturn in business activity” in January, the speed of decline “remains much slower than last spring.” On the outlook for the coming months, IHS Markit said: “While the UK economy is on course to contract sharply during the first quarter of 2021, businesses remain confident that pent-up demand and an easing of pandemic restrictions will provide a springboard to recovery later this year.”
Pandemic hits graduate job market
The Guardian looks at the impact of the coronavirus crisis on the graduate employment market, with the number of entry-level graduate positions falling nearly 11% in 2020 and recruitment levels down at more than half of the UK’s leading graduate employers. The paper notes that KPMG’s graduate programme has seen an increase in applications of around 50% for the 2021 intake compared with last year.
Loan liabilities a risk for SME owners
Analysis by Purbeck Insurance Services shows that owners of SMEs have more than £1.2bn of personal liabilities linked to emergency pandemic support loans, with 1,587 directors agreeing to such terms when taking on credit through the Coronavirus Business Interruption Loan Scheme.
The report, which comes after a Freedom of Information request, shows that the average size of a business interruption loan backed by a personal guarantee is £766,000. With concern that personal assets are at risk, Nic Conner, head of research at business finance consultancy Rangewell, has suggested ministers should consider offering something similar to mortgage indemnity guarantees “but tweaked to protect business owners.”
The numbers could actually be quite a bit higher. The push to move the liability to a Government backed indemnity represents an improvement in the lender’s credit position however it must be noted that the SME was fully underwritten by the funder for a CBIL in the first place, so they should be responsible. If the position is designed to take the Director out of their liability then that’s a win win for everyone except the Government. There is only so much that can be done by the Government and we must avoid simply amplifying the zombie status of many of UK SMEs, living off an ever-increasing government debt.
The long-term future of the UK’s business sector is at its core reliant on people and their resilience. Business has always been about people buying from other people. We must ensure that principally the financial security of individuals is protected so that they can continue to conduct business with each other and while businesses across the country have shown extraordinary levels of adaptability and strength in the face of changing consumer behaviour, we must also appreciate that we are now beyond the survival stage.
Consumer confidence nears record low
Deloitte ’s Consumer Tracker shows that the final quarter of 2020 saw consumer confidence in Scotland fall by two percentage points to a near record low of -18%. Barring personal finances, all measures of confidence were down year-on-year.
Car Sales
Car sales in the UK got off to their slowest start to a year since 1970 with dealerships closed because of the pandemic, January registrations are down about 40% from a year earlier, according to the Society of Motor Manufacturers and Traders. More than 10,000 jobs were cut across the auto sector last year.
Northern Ireland border
The government has asked the EU for a two-year extension to the grace period of less-rigorous checks on certain goods moving between Northern Ireland and the rest of the United Kingdom. Boris Johnson, Britain’s prime minister then to use emergency powers to prevent “barriers of any kind”. Both parties have agreed to “work intensively” to settle differences over the Northern Ireland border amid attempts to cool down controversy which has threatened to reignite one of the most contentious parts of the Brexit deal
Interest rates
The Bank of England (BOE) is due to make its latest announcement on policy and the BOE is expected to keep interest rates and bond purchase targets steady today along side the Governments efforts to prop up the economy. The BOE will also release its quarterly outlook (which is predicted to downgrade its near-term outlook) and a report on the potential for below zero interest rates. Analysts predict they will want to have that tool available but are disinclined to use it.
Covid-19 general news
There were 19,202 new cases in the UK yesterday (3.87m total) with 1,322 more deaths (109k total).
Globally 519,796 new cases brought the total to 104 million with 2,269,121 deaths.
More than 108 million vaccine shots have been given worldwide
Ten Million people in Britain (15% of the population) have now received their first dose of a covid vaccine, the health secretary has announced, in a major boost for hopes of a return to normality. Matt Hancock took to Twitter yesterday afternoon to announce the “hugely significant milestone in our national effort against this virus”.
Chief Medical Officer Chris Whitty said infections remain widespread and the state-run National Health Service would be “back in trouble extraordinarily fast” if social restrictions were lifted.
Some 88% of participants in a study of 20,000 who tested positive for a previous infection still had antibodies after six months, according to the report by UK Biobank, a major biomedical database. The number was 99% at three months. The study confirms previous smaller studies that indicate a level of immunity following a natural infection for at least 6 months. Health officials have however said it’s still unclear how long protection through vaccines could last. The rise of mutations could mean, that like the flu jab, the vaccines may need to be updated periodically to maintain their efficacy.
Oxford University will start a trial combining vaccines from AstraZeneca and Pfizer this week, enabling potential flexibility in the use of scarce supplies globally.
AstraZeneca Plc and the University of Oxford have also started looking at how to re-engineer their coronavirus vaccine to defeat new mutations, saying a tweaked injection could be ready late this year.
Markets.
Yesterday shares in London and mainland Europe started the day higher in the morning on continued optimism around the Covid-19 vaccine rollout. However, the market drifted in afternoon trading as Wall Street opened mixed and weighed on sentiment. The FTSE 100 closed at down 0.14% at 6507.82and the 250 closed up 0.3% at 20752.44. The Eurostoxx 50 was up 0.54% at 3609.75.
Earnings were the focus on the FTSE 100 with big hitters such as GlaxoSmithKline, Glencore and Vodafone all updating the market on performance.
Vodafone was the outstanding performer, rising as much as 6% to 135p, despite a mixed third quarter trading update. The mobile telecoms firm reaffirmed its full year guidance and noted a slight improvement in organic service revenue. The company also highlighted progress on its Vantage Towers IPO which remains “on track”.
GlaxoSmithKline and Glencore were both lower after their respective updates, with the former expecting a drop in earnings in the year ahead, and the latter citing weaker production numbers amid the pandemic.
Overnight in the US, Despite Google posting its best ever earnings and rising over 7%, the S&P 500 rose just 0.10% and the NASDAQ dropped -0.02%
The three-day rally in global stocks has quickly faded, with Asian shares and U.S. futures in retreat as earnings rolled in. South Korean and Hong Kong stocks led Asian markets lower.
Sterling softens notably today as focus turns to BOE rate decision, and more importantly the stance regarding negative interest rates. Sterling is at 1.132 Euros and $1.358 US Dollars.
Brent Crude is at $58.8 having advanced more than 2% yesterday, boosted by a draw-down in stocks that added to demand recovery hopes fueled by OPEC+’s forecast of a deficit in this year.
Gold is at $1822 largely unchanged today while silver prices regained momentum as focus returned to prospects for higher demand for the metal as the global economy picks up, after a sharp slide in the previous session halted a social media-inspired buying spree
Stamp duty holiday sees £530m in lost taxes
HMRC figures show that the stamp duty holiday rolled out to stimulate the housing market amid the coronavirus crisis has seen the Government’s tax take slip by more than half a billion pounds. The figures show that overall stamp duty receipts fell 16% to £2.76bn in Q4, compared to £3.29bn in 2019. The £530m drop in receipts comes despite a 14% increase in the number of transactions. The analysis also shows that stamp duty receipts in Q4 were up 47% compared to the third quarter. Chancellor Rishi Sunak has been urged to extend the tax cut so as to further help the property sector while the impact of the coronavirus outbreak continues, with MPs debating the matter earlier this week after an online petition calling for the March 31 cut-off to be pushed back was signed by 140,000 people.
IFS director expects tax rises
Paul Johnson, director of the Institute for Fiscal Studies, believes taxes will have to rise, telling MPs on the Treasury Select Committee that the public are likely to demand increased spending on health, education and social care in the wake of the pandemic. Suggesting that “in three or four years” the economy will probably be smaller than it would have been without the pandemic, he commented: “It is pretty unlikely that taxes won’t rise as a fraction of national income.” However, Julian Jessop of the Institute for Economic Affairs expects a stronger economic rebound, saying that if public finances continue to beat Office for Budget Responsibility forecasts, “we’ve got a good chance of getting through this crisis without the need to raise taxes.”
Daimler
Daimler announced its wish to spin off Daimler Truck in an IPO, the world’s largest truck and bus maker. The German conglomerate, owner of Mercedes-Benz, wants to focus on zero-emission vehicles and self-driving technologies. The final decision however will be put before investors at an extraordinary shareholders meeting.
Tax demand as Amazon’s sales surge
Demand for online retail driven by the coronavirus outbreak and lock-downs has seen Amazon’s UK sales rise 51% to a record $26.5bn (£19.4bn) last year, prompting calls for it to make a greater tax contribution. The firm has not detailed how much tax it paid in the UK last year but it has faced criticism after paying just £293m in tax in 2019 despite UK sales of $17.5bn. Paul Monaghan, chief executive of Fair Tax Mark, said it was unlikely the jump in UK sales would lead to any sizeable increase in UK tax paid because “a good proportion” of Amazon’s UK sales will be booked in Luxembourg, “where they engineered a near €1bn loss last year”. He said this is likely to lead to Amazon “racking up hundreds of millions of tax credits that will be used to offset future profits that might have otherwise generated tax contributions”. He added that Amazon’s tax contribution “continues to be miserly”.
Asda owners split off petrol stations
Asda’s new owners plan to sell its petrol station network and some of its distribution centres while taking on £3.5bn worth of debt, with Mohsin and Zuber Issa and TDR Capital set to offload the petrol stations to their own EG Group for £750m. Reporting the news, the Times and FT both note that Deloitte resigned as EG’s auditor in October, citing governance concerns.
The World Economic Forum
The World Economic Forum proposed to reschedule the Special Annual Meeting in Singapore to mid-August due to travel restrictions and the current state of the coronavirus pandemic. The meeting had been scheduled for late May.
Birth rate to dip as pandemic hits intimacy
Its not exactly business news, but in the Times, Natasha Preskey considers the impact the coronavirus pandemic has had on people’s sex lives, citing PwC research which suggests the annual birth rate is likely to dip to its lowest level since records began.
Don’t let Covid-19 bust your business!
It will if your cash flow dries up, either sooner or later.
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.
To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.
- The annual package costs start at very low rates
- A minimum performance warranty is provided
- Several complimentary services included
Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).
A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?
Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
Do you sell on credit?
With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.
Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.
You can’t just assume your customers can and will pay you eventually, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply on credit, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
You might be hesitant about contacting a debt collection agency. What are they going to be like?
Can they help your particular type of business?
There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.
Debt collection agencies are not all alike.
Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!
At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.
The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.
We are polite, firm and efficient when it comes to recovering outstanding debt.
“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire
“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Ready to speak to an advisor?
Call us today
0330 053 9263
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs, with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
You put up with the PAIN – now claim the GAIN!
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?
How many of your invoices are paid late each month – 20, 50, 100 or more?
At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim!
At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.
Discover NOW the potential value of late payment compensation hidden in your sales ledger!
For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!
Yes, CPA can help you boost your business cash-flow.
Don’t let your bankers control you, contact CPA today.
Discover NOW the potential value of late payment compensation hidden in your sales ledger!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Read our blog here on how to crack down on the late payment culture.
Read our blog here on how to give late payers the slap they need.
The “Why” of the late payment culture.
New PM should walk the walk and back small firms over late payments
Paying late is “crack cocaine” to big business.
Late payment culture risks “spiraling out of control”
visit our late payment compensation page
See our full blog and FAQ on late payment compensation
Do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
If you sold B2B on credit then there may be a hidden source of capital you can call on.
If you fancy an extra bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.
Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.
We can help you uncover the pile of gold, you didn’t even know you were sitting on.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
That compensation could provide the cash boost your business needed.
But don’t delay, that compensation evaporates if not claimed within six years of the late payment.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
Those former clients who regularly paid you late can finally be made to pay.
Ready to speak to an advisor?
Call us today