Economic Update 31st August 2011
Rise in European road freight rates
European road freight rates are at their highest level for 3 years according to a report by Transporeon and Capgemini Consulting. The increase in the second quarter of 2011 is put down, in part at least, to higher fuel costs being recouped by hauliers. Lack of freight capacity in the market was also pointed to as a possible reason for the rise.
Ramon Veldhuijzen of Capgemini Consulting said, "we saw the typical seasonal price and capacity development in the second quarter of 2011. Despite the normal seasonal upward effect, uncertainty in economic developments in Europe and the US could slow down the price increase during the subsequent quarters in 2011."
http://www.eyefortransport.com/content/european-road-freight-rates-highest-level-three-years
Speculation that the Olympics may leave London crawling
The difficulties likely to be faced by hauliers delivering freight to businesses in London throughout the Olympics are cited as one reason why the Games could have a negative economic impact.
The problem is that for Olympic traffic to get through, organisers have estimated that there needs to be at least a 30% drop in “background” transport movements.
Despite the promises of a business bounce when the Olympics come to London in 2012, the Economist newspaper is speculating that the transport and travel restrictions to be imposed on traders and the ordinary Londoners alike, may hit normal business to such an extent that the Games could put the capital in a worse position than it otherwise might have been.
http://www.economist.com/node/21526928
Transport bosses see a challenging future
The UK’s transport bosses are less optimistic about the prospects for their businesses than leaders in other sectors according to research by Barclays Corporate. Even so, 54% of transport businesses expect steady growth over the next decade.
Those responding to the survey felt that growth would come from technological improvements and because an increasing population is likely to fuel demand. However 25% of transport bosses polled, expect the economy to contract.
The survey also found that in the transport sector only 26% of managers were expecting the UK to be a ‘somewhat better’ place to do business by 2021, whilst 35% believe UK business conditions will get worse.
41% of transport business leaders predict that the UK would be less competitive globally by 2021 with 70% of respondents expecting a drop in export. 17% were anticipating an increase.
http://www.fleetnews.co.uk/news/2011/8/24/transport-sector-expects-steady-growth-over-the-next-decade-but-uk-business-environment-to-worsen/40423/
Will red tape cut, cut off SME credit?
Small businesses may have a harder time getting loans if government plans to cut red-tape become law according to a report in the Financial Times.
As part of its efforts to boost growth, Vince Cable’s Business Department has suggested exempting micro-businesses from the requirement to file annual accounts at Companies House.
A micro-business is defined as one having 10 employees or fewer, with a net turnover of £440,000 and less than £220,000 in net assets. Around 1.3 million companies in the UK would qualify as micro-businesses.
The plans have been attacked by some in the credit reference agency sector who say that without Companies House accounts 37% of Institute of Credit Management members would insist of extra checks or security before dealing with micro-businesses.
The Department for Business, Innovations and Skills is consulting on these proposals until 30 October 2011.
http://www.ft.com/cms/s/0/7343e1c8-cfbf-11e0-a1de-00144feabdc0.html#axzz1WWRy99NK
More youths with nothing to do
979,000 young people aged from 16 to 24 years old are not in employment, education or training (Neet) according to the Department for Education. 18.4% of the age group are at a loose end. This is the highest total for the second three months of any year since 2006. The figure may worsen in the third quarter when recent school and college leavers are counted.
According to research by Barnardo’s 18 to 24 year-olds now make up around 30% of all Jobseeker’s Allowance claimants.
Another survey, this time from the Chartered Institute of Personnel and Development has found that employers are less ready than in the past to hire straight from school or college. Only 12% plan to recruit from school while just 25% will be hiring A level leavers. For employers it seems that work or volunteering experience is highly prized.
The government is currently trying to boost the number of apprenticeships however shadow secretary of state Andy Burnham said, "by scrapping Labour's guarantee of an apprenticeship place for young people who want one, scrapping the Education Maintenance Allowance and cutting careers services, this government is making it harder for young people to get on ………….. For the first time there is a risk that the next generation will do worse than the last," he added.
http://www.bbc.co.uk/news/education-14644613
http://www.telegraph.co.uk/finance/jobs/8720697/UK-schools-not-fit-for-purpose.html
http://www.telegraph.co.uk/news/politics/8723772/Rise-in-young-people-claiming-JSA.html