Doom and Gloom - Not in this Space
It’s sad but true: bad news sells papers. It’s not so automatic, of course. If it were literally true, newspaper circulations would be soaring with all the bad economic news and profits would be through the roof. The opposite is the case. Newspaper circulations have been plummeting. And many are struggling to survive financially.
It’s certainly true that the business sections of newspapers have been full of miserable recession news as companies have failed or have suffered a slump in profits. The impression is easily given that every business sector is in decline and all companies are failing. The problem with this – apart, that is, from it being untrue - is that we can all too readily talk ourselves into a deeper recession than the one we’re in already.
So here are some of the more positive business stories in the past few weeks that may have been buried under the bad news rubble. They show that many companies across a wide variety of different sectors are continuing to do well - and many are investing.
Companies invest for a range of reasons – the need to install new equipment and machinery, a belief that conditions in their sector are going to improve, or that firms need to step up production to meet demand.
I am grateful to Tony Mackay for these examples from his latest monthly report on the Scottish economy:
Ø Endura, the cycle clothing company, is to build a new £2.4 million manufacturing plant in West Lothian. The plant will enable the company to step up exports and target the US and European markets. HSBC is providing a £1.2 million loan, and there is a £235,000 grant from Scottish Enterprise.
Ø The oil and energy sector is notably upbeat Fife-based Burntisland Fabricators will be one of the first to benefit from the go-ahead to develop the £1.4 billion Cygnus gas field in the UK Southern North Sea. The Fife firm will manage the fabrication contract of the platform topsides and jacket, with the creation of 100 new jobs. The contracts will bring a further 50 jobs to GDF Suez’s operational HQ in Aberdeen.
Ø Oil and gas service concern PressureFab is investing £1 million to upgrade its Dundee plant. It will create 25 jobs.
Ø Statoil is seeking permission to develop the Mariner oil field 81 miles south-east of Shetland. It wants to install a platform and floating production vessel, with first production in 2016. The Mariner area, is one of the UK’s largest untapped oil finds, is reckoned to hold up to 400 million barrels of recoverable oil. Statoil wants to build an operational base in Aberdeen and create 1,000 jobs, onshore and off.
Ø Scottish Power has been given the go-ahead to build a new £80 million HQ in Glasgow. The company plans to build a 14-storey block capable of housing 1,500 workers on the site. Work will begin next year and it is thought to be the largest single occupier new-build office development in Glasgow for more than 25 years.
Ø Glasgow’s first-ever five-star hotel, the Blythswood Square, has turned a £600,000 loss into a profit of £992,000.
Ø Dobbies Garden Centres has reported pre-tax profits six per cent higher at £10.5 million in the year to end February on sales up by 22 per cent to £136 million. Six new outlets were opened last year.
Ø Gap Group, the Glasgow-based plant and tool hire firm, recently reported pre-tax profits before exceptionals of £6.2 million for the year to end March – a 170 per cent advance on the previous year. Turnover is up 14 per cent at 84.5 million.
Ø Bus builder Alexander Dennis continues its Lazarus-like recovery. It has reported pre-tax profits of £15.5 million for 2011, against £4.5 million previously. Turnover rose 25 per cent to £357 million.
