BCC upgrades economic forecasts for now, but predicts downturn in 2025
The British Chambers of Commerce has marginally upgraded its 2023 and 2024 GDP forecast but lowered the outlook for 2025, as economic growth for all three years flatlines.
The BCC’s Quarterly Economic Forecast, ranked joint second most accurate by the Sunday Times, predicts the UK will remain in the slow lane.
Vicky Pryce, Chair of the BCC Economic Advisory Council, said: “The BCC’s latest forecast shows the UK economy has yet to find a way to break out of its current rut. While it’s welcome that GDP should continue to expand there is an underlying fragility that is eroding confidence.
“The Government set out several pro-growth measures in the Autumn Statement, but businesses and consumers have had their fingers badly burned by the pandemic and ensuing economic shocks.
“It will take a Herculean effort to shift the dial on investment and consumer spending, against that background, and inject some much-needed vitality.
“The minimum wage increase early next year will further impact investment concerns among businesses, as cost pressures rise.
“As we head towards an election next year, politicians will have to show how they will work with the business community to build on the Autumn Statement commitments and develop a much-needed long term economic plan to give companies confidence to invest in people, trade and grow.”
The UK economy looks set to continue expanding until the end of 2025, but growth will remain very sluggish. A growth rate of 0.6% is now expected for the whole of 2023, dropping to 0.4% in 2024, and nudging up only slightly to 0.6% in 2025. Prolonged high interest rates, trade barriers, particularly with the EU, and limits on consumer spending are all seen to feed into a low growth climate.
Despite core inflation now outpacing the headline CPI rate, BCC research indicates the proportion of firms expecting their prices to rise is continuing to fall. The forecast for the CPI rate is now 4.6% in Q4 2023, 3.1% in Q4 2024, and 1.9% in Q4 2025, when it finally slips below the Bank of England’s 2% target.
Although ONS revisions have revealed the economy recovered from the pandemic much faster than originally estimated, the momentum has been lost. While the start of 2023 turned out better than expected, the second half of the year has been lacklustre, leading to overall growth of 0.6% for the year.
And with interest rates now predicted to fall only slightly in 2024 and business confidence failing to take off, the BCC expects the economy to grow by just 0.4% in 2024 and 0.6% in 2025.
This is a slight increase for 2024 and a similar decrease for 2025, from the BCC’s previous Q3 forecast of 0.3% and 0.7% respectively.
Weak levels of growth in household consumption and a forecast of a reduction in overall real terms Government spending in 2023 and 2024, are also factors in this shaky performance.
Although disposable incomes are now above pre-pandemic levels, households are spending less than they did then, suggesting high interest rates, inflation and global headwinds are weighing on consumer confidence.
Trade is also likely to continue to suffer, with export growth of just 0.5% and 1.2% in the next two years, following a contraction of 0.5% this year. Imports are similarly lacklustre, with further regulatory changes at the UK and EU borders weighing on trade flows.
Against this background, the BCC expects business investment to contract by 0.8% in 2024, a downward revision from –0.1% in Q3, before rebounding to 1.2% in 2025.
Despite the gloomy economic outlook, average earnings are now expected to grow more strongly than inflation across the forecast period, with growth of 5.5% in Q4 2023, followed by 3.5% in Q4 2024 and 2.5% at the end of 2025.
With core inflation remaining stubborn, and fears that wages could continue to put upward pressure on prices, the Bank of England interest rate is expected to fall only slowly – reaching 4.25% in Q4 2025.
While the number of vacancies continues to decline and demand remains subdued, the unemployment rate is also expected to stay higher for longer, hitting 4.8% by the end of 2025. However, this cooling of the labour market is yet to translate into any significant easing of the recruitment difficulties felt by firms, with BCC research showing the hospitality, construction and manufacturing sectors all struggling.
Woodlands Home & Garden Group acquires modular garden building business
Leeds-based Woodlands Home & Garden Group has completed the acquisition of Smart Modular Ltd (trading as My Modular), a modular garden building business with a network of skilled installation specialists, based in Otley.
The firm’s portfolio of products will be rebranded and become part of the Tiger range over coming months.
The modular operation will be based at Woodlands Home & Garden Group’s manufacturing facility at Thornbury alongside the Log Cabin production team, and Stuart Davison, the founder of My Modular, will join the Woodlands board as Commercial Director, to further develop the modular category and to support the wider growth plans of the group.
Ross Moran, Chief Executive of Woodlands Home & Garden Group, said: “As part of our strategy, we are committed to helping our customers find their perfect space, by offering them an extensive selection of high-quality garden buildings that showcase the best possible range of designs, budgets and uses.
“As a result of our analysis of the market, product, and service proposition, we concluded that it would make sense to bring in specific expertise, and the right level of experience, innovation and quality required so that we could enter the market as quickly and effectively as possible. We are delighted to welcome Stuart and his team to the group, and we look forward to working with them to create further growth for the business.”
The news comes as three members of the senior leadership team at Woodlands have been promoted to join the main board of directors: Graham Parlett to Finance Director, Lauren Coley to Product Director, and Agata Choma to Operations Director.
New bus station gets go-ahead in Heckmondwike
Plans to build a new bus station in Heckmondwike have been given the green light by West Yorkshire leaders.
The existing “bus hub” in the town centre will be given a major upgrade, with more bus stands and improved facilities for passengers.
The current traffic island will be demolished, with a new bus station building with indoor waiting facilities built in its place.
The project aims to improve journey reliability and times, as well as reduce congestion and improve air quality.
Tracy Brabin, Mayor of West Yorkshire, said: “We want to improve bus services for people in West Yorkshire – so that public transport is reliable enough to make it the first choice for travel.
“This new station is a big step towards that goal and will make it easier to walk, cycle and wheel in the area too.
“I’m looking forward to seeing the project come to life as we build a better-connected region that works for all.”
This £8.6 million project is being delivered in partnership with Kirklees Council.
The new, fully accessible station will also include extra seating, better footways, cycle parking, solar panels, a “green roof” with plants and more green space for people to enjoy. New toilet facilities will be created, including a “Changing Places” room with extra features for people with a range of disabilities.
It will also improve safety by introducing more CCTV cameras and better lighting.
The new station will make it easier for people to use the bus, cycle, wheel or walk in and around Heckmondwike.
Cllr Cathy Scott, Leader of Kirklees Council, said: “As we unveil the new Heckmondwike Bus Station, we embark on a transformative journey that goes beyond bricks and mortar.
“This station is not just a transportation hub; it’s a catalyst for positive change within our community. With an unwavering commitment to sustainability and accessibility, this project is part of plans to regenerate the town centre and is part of our Heckmondwike Blueprint regeneration initiatives.
“Our vision encompasses a future where bus travel becomes a preferred choice, reducing our travel-based carbon footprint and congestion. By enhancing reliability and attractiveness, we invite more residents to embrace sustainable transport, making strides towards our sustainable and inclusive growth ambitions.”
The scheme is being delivered through the Combined Authority’s Transforming Cities Fund programme, which is aimed at making it easier to walk, cycle and use public transport.
Construction work is due to start in January 2024.
East Yorkshire High Street businesses urged to ask for grants
Businesses on High Streets across East Yorkshire are being given an opportunity to enhance their business premises by accessing ‘Love Your High Street’ grant funding.
The Invest East Yorkshire team, which is part of East Riding of Yorkshire Council, can help business owners to access funding to revamp their premises, increase footfall in the town in which they’re located and boost customer engagement. The team is able to help eligible local businesses access grants though the UK Shared Prosperity Fund (UKSPF) and Rural England Prosperity Fund (REPF). Advisers work closely with business owners to help them identify projects that will help their business grow and evolve, as well as identifying any sources of grant funding that may be available to help them cover the costs. Dawn Hall of the Invest East Yorkshire team said: “Whether you’re planning to upgrade your storefront or workspace, or want to attract more customers and boost local foot traffic, our knowledgeable and friendly team is here to help and advise you. Don’t miss out on this opportunity to make a meaningful impact on your business and community; give the team a call today to discuss your ideas!” For more information or to discuss your project, contact the Business Support Team on 01482 391622 or email business.support@eastriding.gov.uk.Second business incubation hub opens in Rotherham
A second business incubation hub has officially opened in Rotherham.
Rotherham Council has invested £5.4 million to create 20 new workshops, 16 offices and two laboratories at Century 2 Business Park.
Cabinet Member for Jobs and the Local Economy, Cllr Denise Lelliott said: “Our investment will create more better paid jobs and increase spending in the local economy as a result.
“We’re building on the existing success story at Manvers by creating a new vibrant workspace where more entrepreneurs and small businesses can get the support they need to grow. These are exciting times for small businesses who can tap into the specialist expertise offered by Rotherham Council.”
Micro and start-up businesses will benefit from the serviced spaces now available at Rotherham Council’s fifth business hub.
The neighbouring Century Business Park has supported over 400 businesses since it was set up 22 years ago.
Century 2 will feature a central reception and lettable conference facilities for large meetings and functions. Externally, the site will include car parking, cycle storage and electric car charging points.
A fabric first approach has been taken towards creating a more sustainable building and renewable heating will be incorporated within the office spaces via air source heat pumps.
The site is located just off the A6195, with links to M1 and A1. It will be managed by the Council’s Rotherham Investment and Development Office (RiDO), which manages similar facilities across the borough.
Esh Construction was appointed to deliver the scheme as design and build contractor on behalf of Rotherham Council.
Esh’s Operations Manager, Andrew Schofield, said: “This development will provide an important facility for local businesses to operate and grow from, therefore we are pleased to celebrate the official opening.
“Throughout our time on site we delivered a number of social value initiatives within the local community, including careers and employability workshops for young people in nearby schools and colleges, site visits for college students, and apprentice training on site.
“We collaborated with the Better Learners Better Workers programme and RNN Group’s Dearne Valley College to deliver tailored, meaningful engagement within the area.”
Action plans to help regenerate towns set to be approved
Proposals have been drawn up for Knottingley, Ferrybridge and Pontefract that will help towards their economic regeneration and a better quality of life for residents.
The new plans build on the existing work that has already been achieved in providing improved leisure facilities, skills, training, and jobs.
Cllr Michael Graham, Cabinet Member for Economic Growth and Regeneration, said: “The regeneration of these historic towns is important to the district’s future success and for everyone who lives and work in them.
“I’m pleased that we’ve made progress in achieving the goals we set out in 2018, but there is much more still to do and I’m really looking forward to what we can accomplish in the next few years.
“We will continue to work with residents, businesses and partner organisations to do more to support the growth and prosperity of the towns and attract more investment into Knottingley, Ferrybridge and Pontefract.”
Since 2018, 31 projects have been completed in Pontefract and, from 2019, 82 in Knottingley and Ferrybridge.
The completion of most of the targets led the Council to undertake a review, in consultation with local organisations and partners, and decide on other priorities that would transform the towns.
Improving road safety outside primary schools, implementing works to Monkhill station, and supporting the growth of tourism in the towns are just some of the new targets in the new action plans.
£170,000, from the Town Centre Regeneration Fund, has already been allocated to new schemes in the plan for Knottingley and Ferrybridge.
A number of projects will benefit, including upgrading the Great North Road underpass in Ferrybridge and improvements to the play equipment at Simpson Lane on the Warwick estate.
In Pontefract, the Council is working with Mid Yorkshire Hospitals NHS Trust, alongside other organisations including WYCA, Homes England and Historic England, to find a new use for the 19th century Old Dispensary and secure the future of the Hermitage.
Planning guidelines that will shape the built environment in Knottingley and Ferrybridge are also set to be approved, alongside the action plans, by Cabinet members at their next meeting on Tuesday 12 December.
2024 Business Predictions: Steve Adams, CEO, Mattress Online
It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Steve Adams, CEO of Mattress Online.
From a retail perspective Google local search will continue to be an important tool for businesses – making sure the page is updated and correct is key – and having reviews feeding in to elevate local visibility. It’s essentially free exposure, and I see brands making the most of that in 2024.
Along with that, I predict that we will see more hybrid retailing in the coming year, primarily online businesses coming offline and taking steps to invest back into the highstreet through bricks and mortar roll-outs.
For e-Commerce I think we’ll see AI and PMAX almost running online paid visibility by the end of 2024 and working to maximise content for Google’s EEAT policy (Enterprise, Expertise, Authoritativeness and Trustworthiness). The two need to work in harmony, so I see teams placing focus and capacity on those elements of their strategy, as it will be crucial for online businesses to get both right.
Administrators sell Hull firms as a going concern, saving 70 jobs
The business and assets of modular building construction Module-AR have been acquired out of administration, safeguarding more than 70 jobs. The £30 million turnover firm and its assets have been sold to a third party as a going concern.
Dean Watson and Paul Stanley of Begbies Traynor were appointed as Joint Administrators of the Hull-based company alongside Rikki Burton of Anderson Brookes at the end of October, after which they ran a marketing campaign and negotiations with various parties.
Dean Watson, partner at Begbies Traynor, said: “We are pleased to have completed a going concern sale of the business, which safeguards the jobs of a loyal and skilled workforce. These are particularly challenging economic times for everyone in the construction sector but this acquisition saves jobs and enables operations to continue. We have been assisted by Rob Turner of Brabners and Paul Pilling of Hilco Valuation Services with the transaction.”
11-storey apartment scheme tops out in Leeds
Contractor Clegg Construction has held a topping out ceremony at an 11-storey apartment complex being built for property developer Rise Homes in Leeds.
Spinners Yard is a 185-apartment, U-shaped, build-to-rent scheme in Regent Street in the Mabgate area of Leeds City Centre.
It is the second build-to-rent project Clegg Construction has undertaken in partnership with Rise Homes and follows the recent completion of The Ironworks – a £28.7m, 11-storey apartment development in Sheffield.
Featuring a mix of studio, one, two and three-bedroom apartments, Spinners Yard is due to be completed in 2025.
Clegg Construction operations director, Darren Chapman, said: “We are very pleased to have reached the key topping out stage for this development. This will allow us to continue adding the external walls and glazing up the building, followed by the internal fit-out.
“Spinners Yard is regenerating brownfield land and will breathe new life into the area, providing a desirable residential development with a range of properties to rent.”
The ground floor of Spinners Yard will incorporate a plant room, enclosed parking for cars, motor bikes and cycles to one half with the other containing the entrance lobby and reception, the centre management office, a lounge, break out and work spaces, and a gym. Two staircases/lift areas provide access to upper residential floors. The first floor will incorporate a residents’ garden space with another spacious roof garden on the tenth floor.
Once completed, the development will feed into the Leeds PIPES District Heat Network.
Nigel Rawlings, CEO of Rise Homes, added: “We are delighted with Clegg’s progress at Spinner’s Yard and we are very much looking forward to the completion of this sustainable development linked to the Leeds City energy from waste plant offering high-quality, spacious apartments at both affordable and market rents featuring many other environmental benefits.”
During construction work on the Spinners Yard site, Clegg Construction has been hosting groups of Leeds College of Building Trade and Management students, aged 16 to 19, to provide them with valuable insight into the sector. The students have also been visiting the site next door, where Clegg Construction is building The Fabric Works, a 402-bed student accommodation scheme.
In addition, Clegg Construction is sponsoring a local Army Reserve (formerly the Territorial Army) squadron in Leeds by providing T-shirts worn as part of the uniform and during physical training, and is currently collecting food, toiletries and other items for the Blessed of the Father Food Bank, part of Leeds Food Aid Network, at its Spinners Yard and The Fabric Works sites.
Galliford Try lands contract for work at the home of the Red Arrows
Galliford Try has won contracts to create new and refurbished infrastructure for the Red Arrows at their new home of RAF Waddington near Lincoln.
The contracts also include work to build or refurbish facilities at three other RAF stations. The Red Arrows moved to RAF Waddington in October last year. New facilities are now required for the team and their distinctive red Hawk fast jets.
Jon Marston, MD of Galliford Try Building East Midlands, said: “We are delighted to be signing these contracts and look forward to continuing our strong partnership with the MOD to successfully deliver these projects for the RAF and defence. The project team are set to deliver a combination of refurbishments, new build facilities and single living accommodation across the sites.”
The project is part of the MOD’s wider Defence Estate Optimisation Portfolio, which is investing £5.1bn in the infrastructure needed by service people through construction activity, unit and personnel moves, and the release of sites that are no longer suited to the needs of our modern military.
Air Officer Airbases, Air Commodore Portlock welcomed senior leaders from DEO, Defence Infrastructure Organisation and representatives from Galliford Try to RAF Waddington. They signed four contracts to deliver a project which spans RAF Leeming, RAF Saxton Wold, both RAF Boulmer sites and Waddington.
He said: “This significant milestone marks an exciting transition into the much-awaited design and build phase of the project. Providing this essential infrastructure will enable the RAF to make best use of its estate, whilst also delivering our capabilities which are critical to defence.
“Earlier this year, multiple contractors from the construction industry were awarded packages of work across the DEO Portfolio in a landmark move to speed up project delivery. The move will also provide a more collaborative way of working, and a consistent approach to sustainable building practices.”
Director of Major Projects and Programmes for DIO, Charles Hoskins said: “Our first DEO project for Air Command under the new contracting mechanism is embarking on a journey to turn vision into reality. Today we sign the design and build contracts and look forward to collaborating with Galiford Try to deliver all capabilities within this project.
These contracts, which have enabled the disposal of RAF Scampton, will now see Galliford Try design and deliver the required infrastructure for Battlespace Management Force’s Deployable Air Surveillance and Control System, the Mobile Meteorological Unit,and the Red Arrows.”
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