Indonesia: UK exporters must be in it for the long-term says Atradius

Businesses wanting to establish trade links with Indonesia need to be forward thinking, advises trade credit insurer Atradius.

As the largest economy in Southeast Asia, Indonesia is an attractive proposition for UK exporters thanks to its large, growing population and strong domestic consumption. However, export expert Atradius warns businesses must be committed to long-term relationships in order to maximise the potential opportunities of trading with Indonesia.

In its latest Indonesia Country Report, Atradius details the economy only experienced a mild recession in 2020 with GDP shrinking 2.1%. This is partly due to the fact the economy is rather closed with exports accounting for just 20% of GDP, making Indonesia less susceptible to global trade downturns. The pandemic impact saw Indonesian imports decreasing 14% in 2020 with exports down 6%. Looking ahead, Atradius expects the Indonesian economy to rebound by 4.7% in 2021, contingent on the gradual easing of mobility restrictions and effective vaccine rollout. Atradius highlights that Indonesia’s strategy of vaccinating working-age people first could accelerate economic rebound over the course of the year. Atradius expects private consumption and real-fixed investment to increase 3.3% and 5.3% respectively in 2021. Meanwhile, imports are expected to rise around 5% and exports by just over 8% this year.

The Atradius report reveals agriculture has been one of Indonesia’s most resilient sectors amidst the coronavirus pandemic with rising output and exports in 2020. The chemicals and ICT industries have also proved to be rather robust with demand for ICT products rebounding since H2 of 2020 due to an increase in projects supplying hardware and other IT infrastructure. In addition, ICT project wholesalers and suppliers have retained the level of revenues and margins recorded in 2019. Atradius warns the construction sector has struggled with pandemic-induced project delays and postponements but a rebound is expected to accelerate in 2021 across all segments while the energy and mining industries has seen a sharp decrease in investments due to the cancellation of many projects. The market potential in the automotive sector remains strong in Indonesia, albeit a comprehensive recovery is dependent on the rebound of other industries and rising household purchasing power; the latter of which plays a pivotal role for the consumer durables industry. Finally, payment delays and insolvencies have increased in tourism-related service segments with the 2021 outlook dependent on the path of the pandemic.

Atradius industries performance forecast:

  • Good outlook: Financial Services
  • Fair outlook: Agriculture, chemicals/pharma, construction, consumer durables, electronics/ICT, food, machines/engineering
  • Poor outlook: Automotive/transport, metals, mining, oil/gas, services, steel, textiles

Tanya Giles, head of SME at Atradius UK, commented: “As one of the world’s fastest developing countries, Indonesia has a burgeoning consumer market and growing middle class eager for foreign goods and services. As a result, Indonesia offers a wealth of business opportunities but, crucially, only if potential suppliers approach this promising market in the right way. There are distinct business differences between the domestic and Indonesian market and complex bureaucracy to negotiate. However, forward thinking, a long-term commitment and understanding of the market characteristics and cultural nuances as well as suitable precautions to safeguard sales will ensure businesses are best equipped to maximise the potential opportunities for profitable trade.”

LiveDesk named Remote Team Communication & Collaboration innovation of the year

Homeworking specialist Sensée is delighted to announce that its LiveDesk™ Digital Workplace Creation Tool was named Remote Team Communication & Collaboration innovation of the year at the 2021 National Innovation Awards. The winners were announced at a virtual gala event on 11th May.

About LiveDesk

LiveDesks are user customisable Digital Workplaces for communications and collaboration. They unify home and office workers on the same work mission, ensuring everyone is on the same page, by having access to the same information, knowledge, care and support wherever they work from.

LiveDesks are easy to create and manage. Managers have a range of LiveDesk ‘pods’ at their disposal to build tailored workspaces best suited to their needs and work mission, including features such as:

  • Intelligent Chat: enabling advisers to quickly get help from team members, subject matter experts and virtual floorwalkers, tracking Q&A trends.
  • Bulletins & Alerts: keeping advisors updated on major service issues, ensuring everyone is on the beat (and thereby removing reliance on email).
  • Mood & Engagement Pulse: tracking engagement of users across home and office.
  • Social Spaces: enabling private chat rooms for breaks and socialising for engagement.
  • Digital Workplace Dashboards: tracking users frequency, complexity and trends of questions and knowledge needs to have clear capability flightpaths.
  • Teams / Meet / Zoom Facilitation: helping users organise and manage sessions etc. with webcams, voice and screen-sharing.

LiveDesks are always-on but only open during work hours and when managers (key holders) are logged in. They effectively level the hybrid office operating field.

LiveDesk is part of Sensée Cloudworks, a technology ecosystem for hybrid workplaces that comprises unique and innovative homeworking solutions for remote recruitment & onboarding, resource scheduling, communications & collaboration, and security/compliance.

About the National Innovation Awards 2021

The theme for 2021 was ‘technology innovation that improves Work From Home capability, productivity and experience’.

The judges received over 300 submissions. Other 2021 Awards winners were: Noetica & Avoira, Intradiem, Blue Prism, NICE inContact and Medallia.

Jon Snow, Chairman of Directors Club United Kingdom and Convenor of Judges for the 2021 Awards, commented: “Working from home or anywhere is the operational legacy of the COVID-19 pandemic. These 2021 awards set out to highlight the technology developers who are making the distributed workforce not only possible but high performing. One reason the UK National Innovation Awards are respected so widely, is the way they are judged. All our judges are senior business leaders from the organisations that would benefit from the technology innovations being judged. All categories are judged on the quality of the business outcomes that the innovations deliver.”

“We are a 100% homeworking business and the last 12 months have been the most significant in our 17 year history” said Steve Mosser, CEO and CIO, Cloudworks. “It’s been a fantastic opportunity to work with many of the UK’s top private and public sector organisations, helping them understand and embrace the opportunities that homeworking can deliver. The adoption of purpose-built technology solutions is absolutely key to work-from-home being established as a viable long-term option for employees and organisations. We are delighted that LiveDesk has been recognised by contact centre industry leaders at these Awards.”

Mann Island Finance Lending Hits £1Bn

Mann Island Finance celebrated a significant milestone on May 13th when its total financing activity passed the £1Bn mark. It was an impressive number and demonstrated very firmly that the business has come of age as a lender.

The finance case that cemented the milestone moment took place at Alpha Motors in Wigan and, to celebrate the moment, Mann Island Finance MD, John Hughes, presented the customer with a voucher to pay for their first service.

Under the ownership of Investec Bank, Mann Island has evolved into a highly credible motor finance company working across the UK with franchised and independent dealers alongside selected finance brokers. The business combines an innovative digital capability with well-established and easily accessed personal service and a deep insight into the car buying and financing process and has done so very successfully.

Commenting on the landmark moment, John reflects; “Over the difficult last year, we stood side-by-side with our dealers and customers. We stayed open, kept lending and provided rapid forbearance support for people who wanted such help. Our loyalty to them was rewarded by growth that saw us double our market share.

“Having joined the business back in 2000, when Mann Island was a finance broker, the position we find ourselves in today as a rapidly growing challenger finance business is not one I had foreseen back then. It is true to say we have come a long way, but it is also true that, alongside the backing of our parent, Investec Bank, so much of our success as a lender relies upon the ‘can-do’ culture that made Mann Island a success as a broker. We are committed to working harder to help our customers.”

Business Confidence increases significantly with the successful vaccine rollout and a clear roadmap out of lockdown

The effect of Covid on the Savanta Business Confidence Index is clear to see. Confidence had rallied at Q1 2020 following the general election, plummeted with the onset of Covid-19 at Q2, crept back up at Q3, but fell again at Q4 with the introduction of new lockdowns.

Now with the success of the UK vaccine rollout and a roadmap out of lockdown giving businesses sight of a return to near normal, confidence is back up to the pre-2019 election level.

Larger businesses with annual sales above £1m are one of the most confident groups with a confidence index of 49, a significant increase in score of 10 points compared to Q4 2020, though still some 11 points lower than the pre-COVID Q1 2020 index of 60.

The confidence index among smaller established businesses, who represent most enterprises by number, is at 48 with the index having also increased significantly by 10 points on Q4 2020. It remains 7 points lower than Q1 2020.

New start-ups are least confident with a confidence index of 45. This represents a 6 point rise in confidence over Q4 2020, but this increase is not significant. It also remains 7 points lower than Q1 2020.

In terms of geographic location, confidence increased significantly across all 6 regions.

  • The South East is now the most confident region with a score of 50, representing an 11 point increase on Q4 2020, 6 points below the Q1 2020 score.
  • The North/North West and London are the next most optimistic regions with indices of 48, an 8 point increase for the North and an 11 point increase for London on Q4 2020, but 9 and 6 points behind Q1 2020.
  • The Midlands/East is the next most optimistic region with a score of 47 at Q1 2021, an increase in score of 10 points over Q4 to Q1 2021 but still 10 points behind Q1 2020.
  • In Wales/South West the score increased 5 points on Q4 2020 to 45 (the smallest increase), 9 points behind Q1 2020.
  • Scotland remains the least confident area with a confidence index score of 43 this quarter, but this represents a 10 point increase in confidence index over Q4 2020. Score is only 6 points behind Q1 2020.

An index of less than 50 means, perhaps unsurprisingly, more businesses are pessimistic rather than optimistic about the current state of the economy.

Industry sector continues to be a stronger differentiator of sentiment than region, both in terms of the size of the quarterly shifts within a given sector and the degree of variation from one sector to another.

At Q1 2021 confidence rose across all industry sectors and significantly so across all sectors bar Agriculture and Construction.

The biggest increase in score occurred in Education, up 17 points from Q4 to Q1 and now higher than the pre covid Q1 2020 score of 53.

Confidence is highest in the Education (55), Wholesale (51) and Construction sectors (51). Confidence in the Wholesale sector is up 11 points from Q4 2020 whilst Construction confidence is up 6 points.

In terms of age of business owners, confidence levels are higher amongst the older age groups this quarter – those aged up to 34 score 39 (up 1 point) whilst those aged 35-64 score 47 (up 10 points) and 65+ score 49 (up 11 points). All scores remain below the Q1 2020 indexes (-13, -8 and -6 points respectively).

Commenting on the findings Sue Lewis, Director at Savanta, said “The impact of Covid-19 on business confidence is clear to see. Alongside the successful vaccine rollout and more clarity on the roadmap out of lockdown, confidence has increased significantly at Q1 2021. It’s perhaps no coincidence that confidence amongst the older age groups outstrips confidence amongst the under 35s who wait patiently for vaccination. It will be interesting to see whether confidence levels rise again at Q2 and Q3, when businesses plan for, and then experience, opening up.”

A bumper month for construction contract awards as the total value reaches £9.1 billion

In April 2021, contract awards increased by 58% compared to March to £9.1 billion. This level of activity was last seen in January 2020.

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, highlights levels of construction contract values awarded across Great Britain.

Sector analysis shows that residential contract awards increase again in April to £2.5 billion, up from £2.0 billion in March. A strong performance for infrastructure, with total value of contract awards reaching £2.1 billion, the first monthly value over £2.0 billion since January 2020. And the industrial sector activity sees the second highest monthly value on record of £1.2 billion in April, driven once again by warehousing.

Commenting on the figures, Tom Hall, Chief Economist at Barbour ABI and AMA Research said, “Building on the improvements in the planning environment we reported in March, April saw a bumper month for contract awards of £9.1bn. This is the highest value since January last year. All sectors apart from healthcare saw sizeable monthly increases to well above their long-term average values, particularly the infrastructure and commercial sectors.

A year on from the start of the Covid-19 pandemic we have finally seen a value that starts to recover some of the lost ground. However, a fall in April’s planning approvals back to previous levels seen over the second half of 2020 may demonstrate that the uncertainty plaguing the sector has not fully cleared. We require a sustained increase over a period of time to fill the weak construction pipeline.”

City centres hotels must ‘pivot to prosper’ says RSM

City centre hotels must change their route to market to help secure a greater share of pent-up demand says RSM.

The predicted sustained increase in consumer spending over the coming months will see country and coastal operators better placed to enjoy a staycation boom. But city centre hotels, who rely more on the corporate and foreign market will face bigger challenges, particularly with international tourism curtailed.

With less options than their regional counterparts to help offset the many hurdles that face the sector, and with corporate bookings looking likely to stay muted during 2021, city hotels must update their offering and aim to broaden their appeal.

RSM’s call comes just days before hotels in the UK start welcoming guests back after existing lockdown restrictions end on 17 May.

Chris Tate, partner and head of hotels and accommodation at RSM, comments: ‘City operators must pivot their approach to prosper in 2021. Subdued business travel, virtual corporate conferences and reduced inbound tourism will undoubtably impact city hotels. How they adapt to the new market dynamics will be key.

‘Whilst the sector has not seen the wave of corporate failures that many predicted last year, businesses will face many pressure points and so strong management will be needed first and foremost to steer a course through to better times.’

Summer 2020 offers a sign of similar challenges in 2021. Greater London saw the largest fall in room occupancy of any English region from 2019 to 2020, with just 20 per cent of rooms occupied in July 2020 compared with 90 per cent in July 2019.

The challenges are many, including the gradual reduction in government support; departure of EU national workers; increases in national minimum wage and pension costs; supply and demand imbalances; and of course the continuing Covid-safe hygiene requirements.

Chris Tate continues: ‘Local councils and consumer facing businesses in cities will need to work together to boost domestic tourism. Short term initiatives backed up by longer terms plans to invest should give confidence and inspiration to hotels and other retail and consumer businesses.

‘With entrepreneurial spirit and fresh ideas cities can attract visitors once more. This release of pent up demand will also allow for competitive pricing, boosting average room rates for some operators.

‘Whilst operational challenges will be front of mind for the next few months, focus should also be given to the Chancellor’s recent budget and key measures which may bring significant cash savings to the sector. Hospitality grants will be easier for many hotel groups to access considering the change to State Aid Rules thresholds which increased from £3m to £10.9m. The extension to loss carry back from one year to a maximum of three years should also deliver direct benefits to the sector along with the new Super-Deduction relief which will give relief of 130 per cent of costs incurred on capital expenditure as well as 50 per cent first year relief on integral fixtures.

‘Use of the VAT Deferral New Payment Scheme and Time to Pay arrangements should also be maximised and negotiated so businesses agree repayment terms with HMRC.’

Furlough figures underscore challenge for MSPs

More than 300,000 jobs were supported through the Coronavirus Job Retention Scheme in the spring, according to official figures published last week and highlighted by the Federation of Small Businesses (FSB) ahead of the first meeting of the new Scottish Parliament session today.

Congratulating the successful candidates at the Holyrood elections, FSB’s policy chair for Scotland Andrew McRae said that new and returning MSPs need to focus on the economic and employment challenge ahead.

Andrew McRae said: “This was an extraordinary election during exceptional times. On behalf of Scotland’s local business community, I offer my congratulations to those that have been successful at the ballot box and thank all the candidates for their commitment to their community.

“Recovery from the covid crisis was a key talking point during the campaign, and our new and returning MSPs now need to turn their rhetoric into action. Official figures show that in every corner of the country jobs continue to be supported through the furlough scheme. As this initiative winds down, our parliamentarians and government need to focus on building back the strength of our local and independent firms that are so vital to employment.”

At the end of March, Glasgow had more people furloughed than any other Scottish local authority area (39,500) which is perhaps unsurprising as the country’s most populous council area. The city was closely followed by Edinburgh (35,400) and then Fife (19,700), broadly matching the population shares of these areas.

However Highland and Perth & Kinross council areas had the joint highest percentage share of workers furloughed (17%), followed by South Ayrshire (16%). Across Scotland, around one in seven (14%) eligible workers were using the jobs scheme in the spring.

Andrew McRae said: “While these figures were published before the most severe restrictions were wound down, they show the great challenge Scotland has on horizon. While many businesses are already bringing back workers, it looks unlikely that this will be the story across all sectors and industries. The recovery isn’t assured just because businesses can re-open their doors.

“That’s why we need to see the Scottish Government give workers and firms the tools to adapt to the world changed by the crisis. That means the SNP delivering on their manifesto commitment for new grants for firms to help them build their digital capabilities. Incentives to help firms recruit must deliver for firms no matter their size or location. In addition, we must see smarter programmes to help more workers develop the skills that’ll help power the economic recovery.”

As at March 2020, there were 361,875 small and medium sized enterprises operating in Scotland, providing an estimated 1.2 million jobs. These businesses accounted for more than half (56%) of private sector employment.

After the financial crash of 2008, nine in ten unemployed people who re-joined the workforce did so by being recruited small business or by setting one up.

Allica Bank expands broker distribution team and increases commercial mortgage and asset finance maximum loan size

Allica Bank has appointed three Business Development Managers to further drive its broker distribution channel.

The appointments coincide with a decision to further increase its commercial mortgage maximum loan size from £3 million to £5 million following feedback and requests from brokers. Allica’s maximum asset finance loan has also been increased from £250,000 to £500,000. The bank says it has a joint mission with brokers to help more SMEs gain access to the finance they need to grow, and this is part of an ongoing journey to expand its broker operations in the UK.

Having been in the banking and finance sector for 14 years, Arshad Miah joins Allica to manage its asset finance broker relationships in the Midlands and East Anglia regions. With recent experience of a successful asset finance launch, he says he was attracted to Allica Bank because it has created a niche in the market: “As a technology-driven, but also relationship-focused SME bank, Allica is re-defining the future of banking for businesses and for brokers,” he explains.

“Asset Finance is an invaluable offering to SMEs,” he continues, “enabling them to acquire business critical assets whilst spreading the cost over a fixed term – it helps them to grow, expand and stay ahead of their competition. The Government’s recent super deduction tax break announcement makes this form of finance further appealing to SMEs – allowing them to protect profits when investing in their business’ assets.”

Ben Green has worked with SMEs for the last seven years, both in banking roles and as a broker. He will be focused on supporting commercial mortgage brokers and their clients in the West Midlands. He says his experience as a broker will help him to deliver what brokers want and need: “Speed, honesty and communication are key. I look forward to building strong relationships with Allica’s existing broker network as well as bringing new relationships into play.”

Ben says he was impressed to see that Allica won in the Commercial Mortgage Lender of the Year and Business Relationship Manager categories at last year’s NACFB awards: “That achievement so early in its life, as well as huge advocacy from the brokers I spoke to about Allica’s common-sense approach to underwriting and continual support to SMEs throughout the pandemic, make this role a very exciting opportunity,” he adds.

Allica’s new Central Business Development Manager, Sam Roberts, will be focused on building an active and engaged panel of brokers in the asset finance market. He says his five years’ financial services experience specialising in haulage, logistics and construction will help to build Allica’s asset finance offering: “I joined Allica because I was excited by the challenge of building its asset finance division. Also, I really believe in the brand and its drive to support SMEs, and have been impressed by how well it performed during the pandemic.”

Nick Baker, Managing Director – Intermediaries at Allica Bank, says the investment in two new BDMs is part of a strategy to ensure it provides the very highest levels of service to its broker partners: “Arshad, Ben and Sam have the experience and understanding to know what solutions and approaches make brokers’ lives easier,” he says. “I’m delighted to welcome them to our fast-growing team.”

Commenting on the increase in its maximum commercial mortgage and asset finance loans, Nick adds: “Our recent quarterly broker survey showed this is what our broker panel wanted. I am pleased that, thanks to the fantastic support of our broker panel in helping us to grow our loan book, we were able to deliver and will hopefully be able to support even more of their clients.”

Together hires new regional development manager in broker team shake-up

Specialist lender Together has hired a highly-experienced industry professional as a regional account manager for the North.

Gary Lomax, who has worked in specialist lending for more than two decades, brings a wealth of knowledge of the market to his new role.

Previously, he had spent four years as a business development manager for Shawbrook Bank before joining specialist broker, Smart Money, as a mortgage adviser and BDM.

He joins Together from London-based lender Selina Finance specialising in homeowner business loans, commercial finance and second charge mortgages.

In his new role, he will be responsible for developing and strengthening relationships with intermediaries across the North of England to make a large contribution to Together’s continued growth.

Gary said joining Together was “like going to a Premiership football club.” He said: “It was such a big opportunity for me to come into a business of this size and which deals with such a variety of different cases, from regulated first and second charge to buy-to-let and bridging.

“As lockdown lifts, I’m looking forward to getting out to speak face-to-face with more brokers across the North, to support them in developing their businesses with all types of specialist finance.”

His appointment comes as Kara Williams, who joined the lender seven years ago, is promoted to business development manager. She has previously held roles in direct and broker sales, dealing with Together’s key commercial and personal finance intermediary accounts.

Kara said: “It’s been fantastic building up professional relationships with brokers during my seven years at Together. The focus in my new role will be to improve these as the main point of contact for some of our key intermediaries, while building strong relationships with new partners.”

Paula Purdy, intermediary sales manager for the North, said: “We’re delighted to see Kara promoted to the new specialist distribution manager role. She has a wealth of knowledge about our systems and lending criteria, which will be of huge benefit to the brokers she’s working alongside.”

She added: “Gary has worked in financial services for over 20 years covering all aspects of property lending. His knowledge and passion will be a great asset to the team and we’re pleased to welcome him as we continue to grow our business.”

eBay moves into finance to help small businesses in Covid cashflow crisis

eBay UK today announces a landmark new finance program, Capital for eBay Business Sellers (CEBS), to help small businesses rebuild by delivering much-needed access to finance, as entrepreneurs and start-ups across the country face a cashflow crunch caused by the pandemic.

CEBS offers a variety of financing products to support the army of 300,000 small and medium sized businesses that sell via the UK platform to 29 million active monthly buyers, and is eBay’s biggest push into financial services to date, since it started rolling-out the management of payments made on the platform last year.

The launch of CEBS follows new research, released today from eBay UK, which finds a third (31%) of the UK’s 5.9 million small businesses face going bust in under a month due to inadequate access to financing.

The research also found that two in five (40%) small businesses have been denied a loan from a bank, while one in three (31%) have been turned down for a loan by the government. When considering Covid loans specifically, 44% said they have not accessed any Covid support in the past 12 months.

YouLend is the first of three financing platforms announced today as part of CEBS, giving eBay business sellers access to funding ranging from £500 to £1m, which is then repaid directly from their sales. With eBay already having access to seller trading history and performance, eligible sellers only need to complete a simple application form, receiving offers in minutes, with more than 90% of sellers receiving funds the very same day they accept an offer.

This financing solution helps small businesses overcome the many challenges that have left them financially excluded from high street bank loans and COVID support schemes. Lengthy application forms, years of trading history, high interest rates and high risk payment structures are just some of the pain points that CEBS aims to remove for business sellers in need of finance.

It also makes it possible for thousands of entrepreneurs and start-ups that have sprung up on eBay UK throughout the pandemic to access funding to grow and succeed.

Hundreds of eBay businesses have already benefited from CEBS, with two further financing partners set to be announced in the coming weeks.

The CEBS launch is the next step in eBay UK’s ongoing commitment to supporting entrepreneurs and small businesses, delivering economic opportunity and making it easier to set-up, grow and scale. It follows a number of initiatives launched in the past year to help businesses and individuals set up ventures or open new revenue streams online, reducing or removing eBay’s fees through programmes like Pay As You Grow and Free Online Shop Window.

Murray Lambell, General Manager, eBay UK said: “Small businesses make up 99% of all UK businesses, yet they have been financially excluded from traditional lenders and let down by COVID support schemes. That’s led to a serious under-investment, leaving many at risk of going under while others are prevented from reaching their full potential.

“Capital for eBay Business Sellers is intended to help plug this gap, giving small businesses quick access to a range of financing options. With 300,000 UK small businesses trading on eBay, this proposition will help them reinvest, protect jobs, and succeed, even as the government’s support schemes dry up.”

Commenting on the experience of CEBS, Stan Weekes, founder of eBay business SW Trading Ltd said: “The online application took about 5 minutes. After accepting the 6 figure offer, we received the funds the very same day. Greater access to financing will significantly help us to grow and bounce back after what has been a tough year for so many small businesses.”

Jakob Pethick, CCO of YouLend added: “Our focus is on giving leading e-commerce platforms, tech companies and payment service providers the ability to offer their customers rapid funding through our technology platform. We’re delighted to partner with eBay UK to support their business sellers thrive and grow.”