Business Population Increases To 4.9m

the business population of the UK was estimated to have increased by 102,000 to 4.9m at the start of 2013 according to statistics from the Business Department (BIS) and the ONS. It continues a steady growth since 2000 and 2013 is the highest estimate yet.

The rise is mainly due to the increase in the number of small, non-employing businesses, up 127,000. The growth is offset by a fall in the number of employing businesses of 26,000.

The 4.9m private sector businesses employed a total of 24.3m people and had a combined turnover of £3,300bn. Of these 99.9% are SMEs employing 14.4m people (59.3% of private sector employment) accounting for £1,600bn or 48.1% of private sector turnover.

The majority of private sector businesses were sole proprietorships, 28.5% were companies and 8.9% were partnerships and 75.3% did not employ anyone beside the business owner.

Greenhouse Gas Emissions Third Quarter Increase

Total greenhouse gas (GHG) emissions for the year to Q3 2012 have been estimated to have been 560.7m tonnes of carbon doixide equivalent (MtCO2e), an increase of 0.3% on the previous quarter (559.1 MtCO2e). The temperature adjusted measure was estimated at 569.6MtCO2e, 0.3% lower than the previous quarter (571.0MtCO2e).

Total carbon dioxide (CO2) emissions for Q3 2012 have been provisionally estimated to have been 467.7Mt, an increase of 0.4% on the previous quarter (466.1Mt). Temperature adjusted emissions were estimated at 476.6Mt a decrease of 0.3% on the previous quarter (478.0Mt).

Both the actual emissions and the temperature adjusted measure showed only a very small change on the previous quarter and both actual and temperature emissions were similar to the same quarter 2011.

Source sectors' actual CO2 emissions as Moving Actual Total (MAT) show energy supply as the biggest contributor to the 467.7Mt total with 192.1MtCO2e, an increase of 1.3%, followed by transport with 117.9Mt, down 0.5%, business emissions totalled 71.6Mt (-0.8%) and residential emissions 70.1Mt (+0.7%). The public sector reduced their CO2 emissions by 0.5% contributing the least with 7.4Mt with 'other' making up the remainder with 8.7%, a decrease of 0.3%.

Business Confidence Swings Back In Europe

Busines and consumer survey results from the Director General of Economic and Financial Affairs at the European Commission suggest that economic sentiment increased in the EU in November. The economic Sentiment Indicator increased by 2 points in the EU27 (88.1) and by 1.4 points in the euro area (85.7). The Business Climate Indicator (BCI) also increased by 0.42 points to -1.19 with increases in all of the BCIs components.

Business Research And Development

Total research and development expenditure in cash terms in business in 2009 totalled £15.6bn, that is a fall of 2.5% on 2008. The ONS sub-divides business R & D into civil and defence spending. Civil R & D expenditure decreased by 1.4% to £13.7bn and defence expenditure decreased by 10.2% to £1.9bn. In real terms total expenditure decreased by 4.1% to £15.6bn within which civil expenditure decreased by 3% to £13.7bn.

The product group with the highest R & D performance was pharmaceuticals at £4.4bn or 28.4% of all spending. Other significant product groups included aerospace (£1.5bn), computers (£1.5bn), motor vehicles and parts (£1.1bn) and telecommunications (£1.1bn). The region with the highest performance in terms of expenditure was the East of England (24.9%), the South East (23%) and the North West (13.1%) and the lowest in England was the North East (2%) and in the UK N. Ireland (1.9%). In terms of employment, the South East was highest employing the most people in R & D with 35,000, the East of England employed 30,000. The North East, Wales and N. Ireland employed the least at 4,000 each.

Record Number Of Small Business In UK

The Office for National Statistics and the Department for Business, Innovation and Skills recently released statistics concerning small and medium sized enterprises for the UK and regions for 2009. It gives estimates of the numbers of SMEs in the UK the employment they provide and their turnover.

The release says that there were 4.8m enterprises in the private sector at the beginning of 2009, an increase of 1.1% or 51,000 on 2008 and the highest number since these records began in 1994. They employed 22.8m people and their combined turnover was an estimated £3,200bn. Although SMEs account for 99.9% of all enterprises, they accounted for 59.8% of private sector employment and only 49% of private sector turnover. The turnover increased in 2009 by an estimated 5.8% or £1,589bn on 2008.

Most, 99.3%, of the SMEs were small (0-49 employees) and only 27,000 were medium sized (50-249). There were only 6,000 large enterprises (over 250 employees) in the UK in 2008. The number of people employed by SMEs fell by 309,000 or -1.3% since 2008. The number of sole proprietorships increased for the seventh year in a row, by 65,000, to 3.1m. The total number of businesses without employees was 3.6m, up 68,000. They account for 74.8% of all private sector enterprises and a combined turnover of £240bn at the beginning of 2008. Partnerships decreased by 18,000 to 444,000.

Investment In Manufacturing Increases Index

Business investment rose by 0.7% to £29.2bn in the second quarter of 2010 compared with the first quarter. It was also 1.9% higher than the same quarter in 2009. Investment in manufacturing increased by 10.4% to £2.7bn but compared with Q2 2009 it has fallen by 4.9%.

Non-manufacturing investment in the private sector increased by 2.4% compared with the same quarter last year. Distribution services accounted for a significant amount of the change increasing by 13.5% on Q2 2009 to £4.1bn and construction which increased by 12.9% to £585m. Other services accounted for £16.6bn of investment but fell by 1.4%.

Investment in computer software was £1,418m down from £1,663m and hardware £1,348m down from £1,637m in Q1. Business investment in softwae and hardware equals 9.7% of all business investment with 5% on software and 4.8% on hardware.

Employment Stable In Euro Area

Employment in the euro area was stable in the first quarter (Q1) of 2010. During the same period in the EU27 the number of people employed decreased by 0.2% or 455,000 people.

Employment fell by 1% in the euro area in manufacturing and by 1.2% in the EU27 and in construction by 1.5% and 2.3% respectively. In financial services and business activities employment increased by 0.5% in the euro area and 0.3% in the EU27. Employment in agriculture rose by 0.2% in the euro area and 0.3% in the EU27.

Normal Services May Soon Be Resumed

The most recent CBI Services Sector Survey suggests that service sector businesses are still running at below normal levels but less than in the previous quarter. Pressure on profits and deflation are not helping.

Business and professional services' volumes and values both increased slightly for the first time since May 2008 and many firms expect it to continue to increase over the next three months. However they remain below normal for the seventh consecutive quarter. Profitability suffered because of lower prices, which are expected to fall further over the next three months as competition for business continues, but may increase slightly over the coming quarter. Employment also fell again for the fifth successive quarter but less steeply than earlier in the year. Business and professional services are more optimistic than they have been for a long time.

Consumer services values and volumes fell slightly but at much slower rates than the previous three quarters. Over the next three months firms expect values to stabilise and volumes to decline. Optimism is not as strong as three months ago. Profitability in consumer services also suffered from lower prices which are also expected to continue to fall over the next quarter. Employment in consumer services was stable.

Service sector activity was less weak than in recent quarters and things may be beginning to look a bit better.

Bankers Still In Decline As Financials Generally Better

The financial services sector expect business to get better over the next few months for the first time in two years after falls lasting nearly two years. Optimism has risen for the whole business position for the first time in two years. The CBI Financial Services Survey suggests that despite business continuing to fall it is much slower than previously. It is hoped that the general trend will continue to improve though doubts remain over a uniform recovery across all sectors.

Banks increased their spreads to record proportions but remain in decline after giving support to profitability. Business volumes remain well below normal but are set to increase over the next few months. Building societies recorded decreases in income values and spreads leading to lower profitability. Employment is falling. Business volumes have risen in finance houses but not profitability. There have been further sharp falls in employment but less than the last quarter and it expected to continue.

Both general and life insurance volumes have fallen over the last three months. There is optimism in both sectors as volumes are expected to rise. Insurance brokers and securities traders have both seen increases in profitability but securities traders remain cautious. Insurance brokers expect their increases to continue into the next quarter and employment falls were slowest for over a year. Investment managers have seen little change in the quarter despite predictions of falls and employment actually rose. Anticipated falls in volumes and profitability and expected fall in employment mean the outlook for the next few months is not much different.

ONS And CBI See Fall In Business Services Output

Services output seasonally adjusted chained volume of gross value added index fell by 1.2% quarter-on-quarter to 113.3 and follows a fall of 1.3% on the previous three months according to Office for National Statistics latest Index of Services figures. The most significant fall in both quarter-on-quarter and in month-on-month figures was in business services and finance. Distribution fell 0.2% in the quarter to March compared to the quarter to December. It is the 9th consecutive monthly fall, driven mainly by wholesale, motor trades also decreased and retail increased. Hotels and restaurants fell by 5.1% over same period. There were also significant decreases in bars and restaurants. Transport, storage and communications fell by 2.3%. Business services and finance fell 2.2% to 121.7 in the quarter to March on the quarter to December and fell 0.4% between February and March. Government services increased by 0.7% in the quarter to March with the most significant increases in health and social work.

The Confederation of British Industry released its quarterly Services Sector Survey results today. It shows the service sector is still is deep recession. There are some signs of confidence returning. Consumer services fell at their fastest rate since November 2001. The rise in prices made the fall in business values look less marked. Business and professional services values fell faster than volumes due to record deflation in prices. Rates of decline are expected to slow down in both consumer services and business and professional services over the next three months. Employment is continuing to fall in both sectors. Profitability also fell but at a slower rate than the record falls of the previous quarter. Business and professional services show a similar pattern. A steep downward trend continues in telecomms and computing and transport of goods and post. Marketing services also show a continued downward trend in business values and volumes but much less marked. Confidence and profitability have both fallen. There are some signs that the decline is begining to slow.

Decreases In Distribution And Production Investment

Business investment statistics are estimated to show a decrease of 5.5% compared with the previous quarter and 6.8% with this time last year according to the Office for National Statistics. The decreases were estimated to have been in distributions services and production. Capital expenditure was also reduced in the real estate and renting, communications and hotels anf restaurants categories. The business investment figure for the first quarter of 2009 is estimated to have been £33,042 million. It was £34,952 in Q4 2008 and it has fallen from £35,771 in Q2 2008. Services account for £24,605 a fall for the 5th successive quarter from £27,149 in Q4 2007.

Business And Economic Indicators

Business and economic indicators are very useful in monitoring and steering a business or an economy. Indices can be developed to monitor almost anything. Some recent figures from various sources may show how they can help give a sense of direction.

UK retail sales fell 1.2% on a like-for-like basis and 0.6% total compared with March last year. Food sales were slightly up. Non-food non-store sales, a part of total sales and an index that includes Internet sales, were 10.8% up on last year. The timing of Easter made comparisons with March last year difficult because Easter was included in last years March calculations (Interpreted from BRC figures) but will be in April's this year.

The CBI's March survey reported that the majority of retailers said year-on-year sales for March were down but that expectations had been higher. They do not expect any improvement next month.

Manufacturing output decreased by 6.5% in February. The Index is at 90.4, 12.2% down on the same p[eriod last year. Between January and February output decreased by 0.9% from revised figures. Falls were mainly in the car industry, metals and machinery industries (Interpreted from ONS figures).

Producer output prices rose by 2% in the year to March 2009. The Index rose 0.1% from February to March 2009. Excluding food and beverages the rise was 3.3% over the year and 0.2% February to March. Input prices fell 0.4% over the year but rose by 1% from February to March 2009. Input prices excluding food and beverages rose by 7.4% in the year to March and 0.2% February to March (Interpreted from ONS figures).

Consumer confidence is increasing gradually. It is the highest since May 2008 and has risen 5 points to -30 according to NOP. It is still well down on March 2008 by 11 points but the recession hadn't taken hold then. Confidence in the general economic situation is up 7 points to -75 but it is still 32 points down on this time last year. Expectations for the next 12 months have increased by 9 points. Consumers are also more confident about saving than last month but again well down on this time last year (Interpreted from the Consumer Confidence Barometer, NOP/GfK).

The Net Rate of Return of UK companies in private non-financial category for Q4, 2008 was 12.8%. The revised estimate for Q3 was 13.7% or down 0.9%. NRR for manufacturing was 8.5% and services 15.8%. The annual net rate of return for 2008 was 13.8%. It compares with 14.8% of 2007. The Net Rate of Return is an indicator of the profitability of a company (An interpretation of ONS figures).

These indicators can tell us about a business or an economy. They may be accurate, they may not but even if not, that might tell us something about the researchers and/or their methodology.

Management Services

Management services are responsible for gathering and analysing information and data about problems and opportunities. The provision of management services involves using a range of methodologies and techniques and requires an appropriate attitude to problems, opportunities and potential for change. Recommendations are suggested for action. Management should be aware of the effects that the implementation of recommendations might entail.

The main application areas are Control, Business Transformation, HRM, Quality Management, Operations Management, Information Management, Quantitative Work and Method Study.

Management services are concerned with people at all levels of business. Customer relationships should therefore be based on mutual respect.

This Way To The Trough

Economics analysts try to understand the economic world and then devise policies to try to improve it. Economic policy makers try to predict the outcome of alternative economic policies and evaluate them on a scale of better to worse by stating policy objectives and analysing policy outcomes according to political sentiments. An objective and scientific evaluation can be made of economic policy objectives such as efficiency, stability, growth and equity. Economic growth, in terms of incomes and productivity, is one of the main objectives of economic policy. Even in times of recession, economic performance is measured as a decrease in real GDP, or negative economic growth.

Growth transforms poor societies into rich ones but it has costs. The costs of growth are that in doing so it uses up exhaustible natural resources and might damage the environment. Two key factors that influence growth are technological advancement and capital accumulation. Devoting resources to one thing means they are not being devoted to anything else. There is always an opportunity cost. If resources are being used to discover new technologies and new forms of capital, they cannot be used to increase consumption goods and services or on current environmental concerns.

Growth can be measured in terms of the increase in real GDP. The periodic but irregular movement of economic activity we call the business cycle measures fluctuations of real GDP around potential GDP, the real GDP that could be produced if resources were fully employed. The economy has officially entered a recession and will eventually reach a 'trough' or turning point at which it will enter another phase of expansion. It is considered severe at the moment but is not expected to be as severe as a depression. Recessions are unpredictable as are animal spirits. One of the government's problems is closing the recessionary gap (Parkin, Powell and Matthews, 1997).

The current recession could be said to have global proportions. Globalisation means that process by which the production and marketing of products is becoming more integrated and interdependent (Harrison, Dalkiran and Elsey, 2000). As a result of this global economic interdependence the effects of the 'credit crisis' are being felt all over the world. The problem for the international institutions is that there is no model in finance, economics or international business theory that can explain or predict capital flows. The international institutions themselves may be out of date for the problems of the global environment. GATT has been replaced by WTO. The IMF was designed for a system that no longer exists. Internationally agreed policies may be required to curb the trend toward greater deregulation and international financial anarchy (Dawes, 1995).

Growth and population are often related. Rapid economic growth may be linked to rapid population growth. Real GDP per person is a measure of real GDP divided by population and can be used to compare growth rates across countries and over time. There may be similar features in productivity growth figures, business cycles and long-term trends in potential GDP in countries like the major OECD countries.

Long-term economic growth means expanded consumption possibilities, a better environment, pensions, welfare and more support for the poor and disadvantaged. When the rate slows the opposite effects and losses are felt. There is a relationship between the long-term growth rate and welfare and usually a trade-off between spending on welfare and on the productive sectors of the economy that generate growth. One of the biggest problems of macroeconomics is finding a balance of resource allocation between the two rival claims (Parkin, Powell and Matthews, 1997).

The scarcity of resources means that a frontier exists between what is attainable and unattainable in terms of production possibilities. Inward shifts along the frontier reduce our production possibilities and outward shifts expand the possibilities and resources are decreased and increased. Firms reduce production and prices for short-run equilibrium to eventually restore long-run equilibrium or they wouldn't be able to sell their products and customers buy what they need. Consumers may in fact be worried about their incomes and cut spending which would in turn leads to job losses, falling investment and a deepening of the recession. Consumer efficiency occurs when utility cannot be increased by reallocating their budgets. They should budget as wisely as ever for utility, preferences, indifference, substitutes and prices they can afford.

We can only continue to analyse the economic world, gain a greater understanding of how it works and devise institutions to that might improve economic performance. One thing is pretty sure, all the questions and answers will arise from scarcity (Parkin, Powell and Matthews, 1997).