Manufacturing Expands Rapidly –  business news 5 May 2021.

James Salmon, Operations Director.

Manufacturing expands rapidly, pandemic drives subscription addiction, digitalisation could boost trade, home borrowing record, retail footfall and more of the business news stories we thought would interest our members and visitors

Manufacturing expands rapidly in April

IHS Markit’s purchasing managers’ index (PMI) for manufacturing activity shows that the sector expanded at its fastest pace in almost 27 years in April, with demand surging ahead of lockdown measures easing. The index rose from 58.9 to 60.9 last month, its highest reading since July 1994. IHS Markit said: “The sector remained beset by supply-chain delays and input shortages … which contributed to increased purchasing costs and record selling price inflation”. Despite the record increase, UK manufacturers are underperforming compared with their European peers, due to Brexit, with the eurozone PMI coming in at 62.9. This marks the fourth consecutive month that Europe outperformed the UK.

Pandemic drives subscription addiction

The Mail looks at a surge in people signing up to subscription box services, with the pandemic and resulting lockdown restrictions driving up demand. It notes research by Deloitte showing that one in five British households is now signed up to at least one subscription box service.

SMEs: Digitalisation could boost trade

The International Chamber of Commerce (ICC) has warned of the impact that the burden of paperwork is having on SMEs exporting overseas, calling for an overhaul that would see trade documents digitised. This, it says, could create £25bn in additional trade. ICC analysis shows that a trade transaction typically involves 20 to 30 documents. It estimates that making these digital could reduce the time needed to compete a transaction by up to 70%. ICC secretary-general Chris Southworth says the trading system is “antiquated in lots of areas”, noting that some of the legislation around key trade documents was established in 1882 and warning that in some cases, “what should take hours or days to transact takes weeks and months”. Report author Rebecca Harding notes that the number of SMEs exporting has been on the decline for the last two years. She comments: “This is a plea for reform so that we can address a lot of those issues”, adding that it will also make it easier for SMEs to access trade finance.

Home borrowing record

Bank of England (BoE) figures show that UK homeowners borrowed a record £11.8bn more on mortgages than they repaid in March, with market activity driven by the stamp duty holiday and low mortgage rates. Gross mortgage borrowing hit £35.6bn in March, with buyers looking to tie up property purchases ahead of the end of the stamp duty holiday, a tax break that was extended in the recent Budget. Although the number of new mortgage approvals dropped from 87,000 to 83,000 in March, they remained higher than the 73,000 recorded in February 2020 – the last month before the UK rolled out pandemic-related restrictions. Andrew Montlake of mortgage broker Coreco said stamp duty relief was having an “insane effect” on the property market, saying that March’s mortgage data highlights a “frenzied rush” of people looking to buy in the second half of last year and benefit from the holiday on the levy. Meanwhile, the BoE said deposits into accounts “remained strong” in March, with £16.2bn more deposited than withdrawn – exceeding the £4.7bn monthly average for the year to February 2020. The report also reveals a net consumer credit repayment of £535m, including people’s borrowing using credit cards, personal loans and overdrafts.

Tim Beale, CEO of housebuilder Keepmoat, says the pandemic has seen many people re-evaluating their housing requirements, with the shift in priorities likely to sustain the thriving property market for several years

Retail Footfall

UK Retail Footfall dropped 6.1%, according to figures from retail insight company Springboard. The number of shoppers across all retail destinations fell by 2% last week from the week before. Footfall rose by 2.8% in shopping centres and 1.6% in retail parks.

Berkshire Hathaway

Berkshire Hathaway plans to name Greg Abel as chief executive when the conglomerate’s longtime chief, Warren Buffett, eventually exits, after VP Charlie Munger let slip the culture was safe in his hands.

Billboard boom as city life returns?

Ben Woods in the Telegraph looks at how the pandemic has hit billboard advertising firms, with a decline in the number of people in city centres seeing a fall in eyes on ads. Reflecting on how much activity city centres will see as the UK comes out of lockdown restrictions, KPMG data showing that just 17% of CEOs plan to downsize their office space compared with 69% in August last year is cited. However, a separate study of 600 medium-sized businesses by Grant Thornton saw 5% say full-time office working would be most effective post-pandemic.

Scottish firms fear running out of cash

Two fifths of Scottish businesses fear they will run out of cash within the next six months, according to the Business Insights and Conditions Survey from the Office for National Statistics. The poll of 1,200 businesses across Scotland between April 6 and 18 saw 39.3% warn that cash reserves won’t last beyond half a year. Around a fifth said their reserves would last between one and three months, 16% said between four and six months, and 2.7% said a matter of weeks. The figures follow Red Flag Alert data from Begbies Traynor which found that 38,000 businesses in Scotland were showing “significant” financial distress.

Wealthy set to escape tax raid

The Telegraph’s Tom Rees says wealthy people in the UK may be spared from a US-style tax raid, with Chancellor Rishi Sunak praising the strength of Britain’s surging economic recovery. Noting that he is “cautiously optimistic” about a bounceback in economic growth, Mr Sunak suggested measures announced in the March Budget should be enough to return public finances to a level footing. This, Mr Rees says, suggests the Treasury is unlikely to deliver a hike in capital gains tax. Speaking at the Wall Street Journal’s CEO Council summit, Mr Sunak said the richest families in Britain are already taxed heavily. Noting that the top 1% of income earners pay or account for almost 30% of all income tax receipts, he said: “I think we start with a very progressive tax system.” Speculation on a tax hike to cover the cost of the pandemic was increased by a review by the Office for Tax Simplification last year which said billions of pounds could be raised by a “greater alignment” of CGT and income tax.

Pandemic creates jobs risk for working women

Analysis by the Trades Union Congress shows that working women are facing a significant risk in the labour market, with far greater numbers of female staff being made redundant as a result of the pandemic than during previous recessions, including the 2007 financial crisis. Female redundancies in the UK hit 178,000 between September and November 2020, with this 76% higher than the peak reached during the height of the financial crisis when female redundancy levels hit 100,000. The report shows that 217,000 men were made redundant over the same period last year, with this just 3% up on job losses amid the financial crisis. TUC general secretary Frances O’Grady commented: “Women are more likely to be on furlough than men and to work in sectors hit hardest by Covid, like retail and hospitality”, adding that they also bore the brunt of childcare while schools and nurseries were closed. “Without ongoing support from ministers, many more women face losing their jobs,” she added.

Government not trusted to tackle tax avoidance

A poll on behalf of the Co-operative Party suggests that less than a third of people trust Prime Minister Boris Johnson and Chancellor Rishi Sunak to crack down on global tax avoidance. It was also shown that three quarters want the Government to play a leading global role to reform the tax system. This comes as world leaders look to agree reforms to the global tax system, with talks over the matter taking place between 139 countries at the OECD. Mr Sunak yesterday said that he wanted to reach a deal, saying the UK was “open to having a package” that involved rules to end profit shifting and establishing a global minimum corporate tax.


Pfizer reported first quarter revenues of $14.6bn, a 45% increase on the Q1 in 2020. The strong results were down to sales of the covid-19 vaccine developed with BioNTech, which brought in $3.5bn. The company raised its expected yearly revenue from a maximum of $61.4bn to a maximum of $72.5bn


US stocks and in particular the pandemic winning tech stocks were hit after Janet Yellen made the entirely reasonable point that that interest rates will likely have to rise as government spending ramps up and economic growth accelerates bringing inflation pressure even though she later clarified she was not  actually forecasting rate rises.

Direct Line

Direct Line Insurance reported a fall in premiums in the first quarter of the year, paced by a decline motor premiums on fewer new car sales and new drivers entering the market. For the first quarter, gross premiums fell 4.7% to £752.3 million year-on-year, with motor down 10.6%, while home grew 1.8% and commercial was up 16.1%.


A shocking 7% of British adults fell victim to a cyber-crime in 2019.

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