SCIENCE & MEDICAL
Access to finance still an issue with part of the sector where we see either delayed, cancelled, or partly run projects. This is typically seen with smaller and virtual type pharma and biotechnology companies. Generally a slow down in the marketplace with fewer assets being developed, we can see discounting from large competitors to win work and reductions in headcount in those and allied industries. Input costs have stabilised and are now running at roughly half that seen in 2023. Limited recruitment with no particular issues.
DEFENCE
Defence and security sector is challenging. MOD spending was frozen until April which had effect of SME’s in sector. Uptick in GDP % on spending is not showing affect anticipated. New Labour Gov may not honour. Labour proposing strategic review of armed forces. Ukraine is driving sector. 50% of turnover in sector is related to war. Different countries have different policies on spending (Japan medical kit only). $60bn US funding welcomed. Putin has spent $300m. Trump may not honour.
EDUCATION
GCSE time – 680 students sitting maths which is a legal requirement. Students haven’t all achieved required level when leaving school. Awaiting election too see policy on T levels, Curriculum reform etc. Thought would be post Sept and that the 24-25 funding agreements would be in place by then but now this won’t be the case. What will happen to the National Skills Board, LSIP, Regional/central planning, levy spending? Permanently in state of reform. Currently not spent well, decline in spend on engineering for example, and some geographical imbalance in uptake of apprenticeships.
Higher education difficult – student fees haven’t changed but costs have increased, and changes to International students. New intake of 75 students at NMiTE this year. Number of local sites growing and linking with other Universities at UK and at home. Future skills centre up and running and will help links and support small businesses. Military to business event 20th June at Shell Store. £320,000 funding secured for veteran’s centre in Hereford, and sessions in surrounding towns.
FOOD AND DRINK
Food price inflation remains major factor in RPI. 11% inflation correlated to 19% food. Food inflation has fallen significantly in recent months and is now in line with general inflation. Food foundation basket is regulator for spend – indications are this is rising. Own label products still more popular currently than brands. 8m adults in UK are in food “poverty” much of this is down to waste, and healthy options are becoming too expensive. Vegetables gone up over 100% in 2 years, therefore healthy options being taken away, 60% eating less fruit because of price and availability. Seasonal dependence is going to become more challenging. 55% of seasonal foods are imported in summer, 65% in winter driving prices. Food processing is very energy dependant leading to cost. Whether also causing difficulties this year, will only see bigger price changes and availability. Big question is yield this year.
LEGAL
Corporate busy, deals are flowing better. Property market frantic with stamp relief for granny annexes ending soon, causing a rush in the market. Commercial steady, working from home might be having effect still. Employment law seeing less change in numbers and more natural wastage, some enforced. Employment – employers looking at rolled up holiday pay, cautious on recruitment, redundancy, focus on performance and under performance. Increase in harassment through TEAMS and social media has presented employment law problems. Employer has a duty of care, so remind employees.
IT/CYBER
Threat through ransom and malware still happening alarmingly more – e.g. via password security, clicking on incorrect links. Sometimes speed of actions catches people out – Devon water example. PSTI – Product security and Telecommunications Infrastructure act. All about IOT devices (things at connect to internet) – need to be more secure. In manufacture or selling into this market, this may apply to you. 35 billion of these in use.
MANUFACTURING
Construction output falling 2 ½ per year. Refurb market falling, BUT back to normal levels pre-covid. Some companies suffering, Everest and Safestyle failed. High interest rates have not helped consumer spend. Capacity has dropped in market allowing some companies to benefit. Legislation around future home standards still uncertain. Election likely to delay this further. Price inflation and energy stabilised. Focus highly now on recycling. Challenges around people, mostly at operator level. Some areas of the market still growing significantly.
BANKING
Commercial banking all about lending. Business need confidence. They need certainty. This is short in supply. Political uncertainty not helping. Discussions around deposits rather than borrowing. Locally businesses are handling costs better. Supporting sustainability is big factor in lending. Businesses are approaching Lloyds through relationships, this is so important for the banks. M&A work strong. Business costs under control. Sustainable ventures given good incentives. Merger and acquisition work high.
RETAIL
Equestrian trade tough, turnover down, in US too, and perhaps down to pre-covid levels. Containers up to $5000. Were down to $2000 after covid hikes. In far east the value of the Yen is a concern. Badminton Horse Trials is a huge industry event – for the traders it was not as good as previous years. Staff still difficult to recruit (office).
TRANSPORT
Reduction in demand. Over capacity in UK. Race for rate driven down. Not best year, not worst. Number of insolvencies still a concern. Supply of drivers ok. 98% are white male over 45 years. Industry is incompatible with modern life styes making recruitment. 60bn ANPR hits a day making police prioritisation impossible! £100m being invested to improve roadside facilities, but challenges with planning etc. Electric HGVs 366 sold in Q1 (440% Growth) but still only 3%. Automated Vehicle act passed, paved way for semi/automated vehicles (2026 estimated to be first one).