PRO INSTALLER DECEMBER 2016
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PRO BUSINESS
BUSINESS CONFIDENCE IN NEGATIVE TERRITORY
The Federation of Small Businesses( FSB) has found that UK small business confidence has continued to fall, dipping into negative territory for the first time since 2012. Business owners feeling confident are outnumbered by those that feel the opposite. However, FSB found many immediate economic conditions improving, with small firms reporting greater access to finance, a rise in new employment and reduced spare capacity in their businesses. In data gathered since the UK’ s decision to leave the EU, the FSB Q3 Small Business Index( SBI) found business confidence in negative territory(-2.9). This is the second largest yearon-year fall in confidence in the Index’ s history, with the largest drop occurring in the previous quarter of 2016( Q2). Confidence has now fallen for the last three quarters in a row. Despite this, FSB found many positive signs of small businesses proving resilient and getting on with the job in hand, in spite of a fragile economic outlook in the longer term, spurred by political uncertainty caused by the outcome of the EU referendum. Many firms may have‘ priced-in’ the impact of the EU referendum result in advance of the vote, with others looking for immediate growth opportunities. The share of small businesses aspiring to grow over the next 12 months also ticked up this quarter, now at 55 per cent, the highest level since the end of 2015. On the flip side, the share of businesses expecting to downsize, close or hand on the business fell to 11 per cent. Small businesses have started to take on new staff, with a net balance of seven per cent of small firms report increasing headcount this quarter. This is the first time that smaller companies reported an increase in hiring this year. Small businesses also expect this positive trend to continue into the final quarter of 2016. Credit availability has continued to improve. The SBI credit availability and affordability indices stand at their highest levels since records began at the start of 2012. Small exporters’ performance has also improved, backed by the weakness in sterling, with more businesses expecting this to rise further in the next few months.
Mike Cherry, FSB national chairman said:“ There is no doubt that the political shock of the Brexit result took place at a time of weakening business confidence. For the first time in four years, confidence is in negative territory. This persistent downward trend in UK business confidence reflects underlying issues that predate the Brexit decision.“ Small firms are resilient and will survive the current fragile economic outlook, but to avoid an economic slowdown this data should be a wake-up call for our elected politicians. The UK small business community seeks key domestic policy decisions if we are to grow, invest, export and to create jobs.”
LIVING WAGE CHALLENGE
Research from the Federation of Small Businesses( FSB) found small firms are meeting the challenge posed by the new National Living Wage( NLW) with the majority( 59 per cent) absorbing the costs by taking lower profits. Following the introduction of the new wage in April 2016, small businesses have demonstrated their resilience in meeting this challenge, but some businesses have struggled to do so. FSB’ s quarterly business survey found that 47 per cent of small businesses now cite wages as the main contributor to the rising cost of doing business. FSB is calling for the Low Pay Commission to be given flexibility on how to meet the government’ s NLW target of 60 per cent median earnings by 2020. FSB wants this target to be adjusted if it becomes clear the economy cannot bear the rapid pace of NLW increases. The NLW is currently projected to rise by £ 1.85 per hour over the next four years, reaching £ 9.05 by 2020. FSB research found that the majority of small businesses were already paying all their staff above the new NLW of £ 7.20 an hour. Despite this, however, about a third of businesses( 32 %) said the new wage has led to some increase in their wage costs and further one in five( 19 %) said labour costs went up significantly as a result of the new wage.
‘ labour costs went up significantly’
Of the businesses that report increasing labour costs from the NLW, the majority of them( 59 %) absorbed the increased cost through reduced profitability. However, some firms have had to take other action in order to stay afloat, such as increasing their prices( 35 %), reducing staff hours( 24 %), cutting investment( 23 %), and recruiting fewer workers( 16 %). Some businesses also sought to meet the increased cost through improved efficiency( 13 %).
www. fsb. org. uk
Digital Built Britain will transform construction
The next phase of‘ digitisation’ in the construction sector has been announced, and it is set to revolutionise every aspect of the industry as it has done in other areas.
‘ reductions in project costs’
‘ Digital Built Britain,’ first announced in the 2016 budget, will deliver reductions in project costs and carbon emissions, while improving productivity and capacity by using intelligent Building Information Modelling( BIM), sensing technology and secure data and information infrastructure.
Eventually, the aim is that BIM should help citizens make better use of the transport, water, communications and energy infrastructure already in place. Ground-breaking work on data infrastructure within Digital Built Britain will help to deliver other government digital objectives, including building successful UK sectors in smart cities, cyber and physical security and sensors through the‘ Internet of Things.’ The BIM Task Group, in association with the British Standard Institute( BSI), published‘ BIM Level 2 Guidance: UK edition’ at the end of November. This guidance is online at http:// bim-level2. org / en / guidance /.
www. digital-built-britain. com