September 2016 economic statistics: All the figures SMEs need to know

Here’s the truly good news: uptake of the government’s R&D tax relief scheme has increased by 37 per cent, according to HMRC  which also had an interesting month in terms of confiscating the assets of a rising number of businesses. London and the South East of England made the highest number of tax relief claims. Northern Ireland made the lowest number of claims at 2.7 per cent of the total, but also saw the greatest increase in uptake of the scheme in the past five years.

Brian Williamson, managing director of R&D tax specialist Jumpstart, said, “the figures were a relief given that R&D was crucial to the long-term growth of the economy.” But it looks like the economy has managed just fine. Results have suggested the UK fared better than predicted after the Brexit vote, with the services sector growing by 0.4 per cent.

“Despite some very weak indicators appearing in the immediate aftermath of the referendum, estimates gathered by ONS from more than 23,000 firms suggest that the services sector – which accounts for three-quarters of the economy – grew strongly,” said ONS’ head of GDP, Darren Morgan. “Further information also suggests the whole economy grew slightly more strongly in the months before polling day than previously thought.” 

In fact, UK200Group and Hillier Hopkins LLP found 65.4 per cent of private business owners noticed no change in business enquiries or sales since the referendum, and the research coincided with an announcement from ONS that it was revising its estimates for UK GDP growth from 0.6 per cent to 0.7 per cent.

The referendum did little to deter British firms from exporting as well. ONS revealed that total exports rose by 1.9 per cent, so our September 2016 economic statistics feature marks the second successive month of increases as the fall of the pound made British goods and services cheaper overseas.

“As well as favourable changes in currency rates, recent scrutiny of Britain’s overall trade deficit – which narrowed by £1.1bn in July to £4.5bn, from £5.6bn a month earlier – has helped ensure the government is particularly supportive of UK businesses trading overseas,” said Clive Higglesden, head of trade product for Lloyds Bank Global Transaction Banking. “This is even truer now than it was at the start of July. Since becoming prime minister, Theresa May wasted little time in creating a new department for international trade.”

And British manufacturing showed us why it was dubbed a success story. It continued its climb up the global rankings, with EEF and Santander revealing Britain is now the ninth largest industrial nation with an annual output worth $247bn. This accounts for ten per cent of Gross Value Added for the UK economy. This positive picture is reflected in data on employment and earnings where, according to the OECD, British manufacturers have outperformed any country except the US for job creation since 2010.

Be that as it may, the impact of the pound is being felt unevenly across the business landscape, with smaller firms bearing the brunt of higher import prices, according to FEXCO Corporate Payments.

If you liked September 2016 economic statistics feature, make sure you check back in next month for our October roundup.

Meanwhile, although the UK is experiencing a skills gap crisis, new research suggests it may remain that way as young people admit they’re snubbing employment within companies in order to start their own operations that they can run from home.

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