Business news

Small companies in Britain are leading the world in terms of the growth in business confidence, survey data show.

News that the construction sector has returned to growth has been cautiously welcomed by industry experts. However, a recent survey indicates that house building is leading the way, while commercial construction and civil engineering remains in the doldrums.

Residential building work has increased at its fastest pace for more than two years and total construction output has risen for the first time since October 2012, according to the CIPS UK construction purchasing managers’ index, conducted by Markit. More than 40 % of construction firm directors who answered the survey are optimistic and predict a rise in output in the next 12 months.

Chartered Institute of Purchasing and Supply chief executive, David Noble, said: ‘The construction sector seems to have turned a corner after six dismal months. The improvement has been fuelled by a boom in house building, but the sector remains bogged down by contractions in commercial construction and civil engineering.’

He went on to say that a lack of public sector projects was having an effect on civil engineering, and this, combined with poor performance in the commercial sector, meant house building alone was driving the industry growth.

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UK retail sales have increased 2.1% in May on the previous month, according to figures from the Office of National Statistics.

Sales volumes also increased 1.9% on May 2012, sparking predictions that the UK economy is slowly recovering.

David McCorquodale, UK head of retail at KPMG, said: “This is a solid performance by UK retailers and this increase in consumer spending us hope that the UK economy might be finally turning the corner.

“However, promotions were used to drive these sales, especially in the food sector, and this decision to discount will have eaten into retailers’ margins.”

Food retailers saw a 3.4% increase in the amount customers spent in May on April’s figures, although quantities bought decreased 0.5% in the same period.

The amounts spent in clothing and footwear stores increased year-on-year by 2.1%, a growth of 1.1% from April 2013.

Online sales in May 2013 totalled £582m, an increase of 10.3% compared to May 2012, highlighting the continuing shift in consumer shopping habits.

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A debt advice organisation has claimed that payday loan companies are lending to under 18s, people with mental health issues and individuals who were drunk at the time.

Citizens Advice said its analysis of 780 cases reported to it between 26 November and 13 May 2013 revealed evidence of “inadequate” checks on borrowers, with people chased for debts when the loan had been taken out by someone else using their identity.

It found that three out of four people, or 1,539 cases, struggled to repay the loan, with 84% saying that lenders did not offer to freeze interest rates or charges despite saying that they would do so.

During the six month period, 24,575 people went to Citizens Advice to seek advice about payday loans.

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The Centre for Retail Research (CRR) is warning that High Streets could see 20% of their shops close down within five years as more people turn to the internet for their shopping.

The organisation, which conducts research into retail, technology and crime, says this would equate to 62,000 shops closing down.

The CRR believes large areas of the UK’s High Streets would become housing.

It also says as many as 316,000 workers would lose their jobs.

The CRR says online shopping will continue to expand and the proportion of shopping done via the internet will double to 22%.

The report, which was produced by Prof Joshua Bamfield, said the first shops to go would be pharmacies and health and beauty stores.

Retailers specialising in music, books, cards, stationery and gifts will be next.

DIY shops will also suffer.

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The Air Travel Trust (ATT) – a fund used to meet costs when an airline goes bust – has returned to surplus for the first time since 1996, after a fall in ATOL failures.

The annual report details that the ATT received £48.1m inATOL protection contributions from 19.2m passengers for the year ending 31 March 2013, up from 17.3m passengers during 2011/2012.

Roger Mountford, chair of ATT, said: “The relatively low number of ATOL holder failures shows how well the travel industry performed last year, despite challenging financial circumstances.

“This more stable period for the industry has resulted in the ATT’s welcome return to surplus – consumers now enjoy greater protection for their holidays.”

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Sadly, 25% of businesses fail within their first year and an astonishing 70% of businesses fail within ten years. So, if you’re thinking about starting a business or you’ve recently made the leap, how can you optimize your chances of success? What is the single most important factor in determining your success? This question was asked of 10 successful business leaders from the Young Entrepreneur Council.

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