Don’t worry, we’re not referencing a Madness album or Craig David song with that title! In this article we take a snapshot of British business, looking at industries on the rise and those falling in the current economic climate.
The UK CBD (Cannabis-based medicine) industry was born in 2018 when it was legalised. Conservative estimates value the market at £2 billion by 2025. The sale of CBD oil to the public for a variety of ailments has presented opportunities for budding entrepreneurs. Although it’s a newly established industry, Advocate has been the collection agency of choice for businesses leading the way.
The latest IBISWorld report predicts Music Festivals in the UK will grow by 861.7% in the year 2022-2023. Festivals firms were thriving before the pandemic put many into hibernation. Those events which have taken place were artificially small due to Covid-safe obligations. Before revenue collapsed in 2020, the UK Music association valued the sector at more than £1 billion with attendance at 4.9 million in 2019. The sector is tipped to bounce back strongly as restrictions ease and festivals become viable again. Likewise, the Conference and Trade Show industry should see triple-digit growth in the year 2022-2023, having been similarly impacted by Covid restrictions. Throughout the pandemic, Advocate continued to receive debt collection requests from new and existing clients organising festivals and conferences.
The easing of Covid restrictions is sponsoring economic growth, although you could argue it is recovery masked as growth. UK Passenger Rail will see revenue growth of 201.2% for the year 2022-2023 according to IBISWorld having been choked by lockdowns, furlough and working from home directives. The Airports Industry is expected to see similar gains, albeit heavily dependent on Covid variants Omicron and beyond. Tourism was always going to be at the mercy of Brexit. The 2016 referendum saw Sterling plummet giving tourists a favourable exchange rate. First to benefit was the Sauna and Solarium sector which saw a huge influx of EU visitors. Since then, domestic and international demand has fallen because of limited pandemic trading and opportunities. Lower end estimates indicate the sector will thrive once again from summer 2022 and experience year-on-year growth in excess of 120%. The Holiday Accommodation sector initially benefited from the referendum before restrictions all but suspended international tourism in peak season. The rise in staycations helped fill the void, and IBISWorld expects sector revenues to increase by 157% in the year 2022-2023. For similar reasons, Budget Hotels and Caravan/Camping Sites are expected to see growth of 148.7% and 139.6% for the period respectively.
The Property Market is also seeing a revival with the highest annual growth for 17 years reported in 2021 by the ONS. Estate agencies great and small are driving recruitment on sites like Indeed to meet demand. The lure of banking on the boom has seen some innovative niche services launched by entrepreneurs and their quickly established start-ups. Buying a home is one part of the equation. If there is one thing the pandemic has taught us, it is that British households like to be busy when on furlough or working from home. Online sales of Home Improvement and DIY grew by 50% in 2021. In some cases the demand for Home Furnishings outstripped supply. The British Furniture Manufacturers trade association found 43% of members are planning to recruit more staff in the first quarter of 2022. High demand is no guarantee of payment, and independent British manufacturers are calling in debt collectors to ease the load and maximise their time dealing with new orders. With the pandemic’s advent, the Safety Equipment and Supply industry saw rapid growth to approximately £1.6 billion. AMS Global Inc expects revenue growth 2021-2022 to hit 78%. Because this was largely attributable to demand for PPE, the sector is expected to contract for 2022-2023.
Online Food Ordering and Delivery will see revenue growth of 45.1% in the year 2021-2022 according to AMS Global Inc. Research from McKinsey & Co. suggests the market has tripled in size since 2017. Just Eat announced in January 2022 that orders had grown by a third in 2021. Although restrictions on hospitality settings have been rolled back, capacity is an issue. Online platforms are banking on the click and deliver boom being sustainable in the short to medium term. Immersive Technology (also known as augmented, mixed and virtual reality) has grown by more than a third over 5 years and is no longer the preserve of video game connoisseurs. It is finding uses in healthcare, training and education settings. Contrary to an April fools’ prank, debt recovery in this sector is not done wearing a VR headset! The contribution of Renewable Power to the UK energy supply has doubled since 2014. The industry is now worth over £42 billion and growing. In October 2021 Prime Minister Boris Johnson set a target that all UK electricity should come from renewable sources by 2035. The UK’s green energy revolution and ambition to be self-sustaining could see it immune from international wholesale price increases. Advocate has several long-standing clients who supply components used in generating renewable power. Every industry needs debt collectors and this one is no different.
Coal Mining once played a pivotal role as the fuel of industry. At its peak in 1913 some 292 million tonnes, a year was mined. The UK coal mining industry has shrunk by over 90% since 2010 with 1.6 million tonnes extracted in 2020 and marginally less in 2021. Analysts expect tonnage to decline by up to 40% in the year 2022-2023. The Spirits and Liquor industry has witnessed a decline of 75% in the decade to 2020. Social trends and the promotion of healthier lifestyles are significant factors in the market contracting. Consumption has increased marginally since 2018 but inflation is expected to reverse recent gains. The Video/Game Rental industry was in decline long before Blockbusters ceased trading in 2013. Surprising to some, there is still demand for renting movies/games on discs using the postal network. Online subscription services for streaming and alike have seen the rental market contract by 34.2% in the year 2020-2021 according to IBISWorld who expect a further decline of 15.4% in the coming year.
In 2021 UK Car Production fell by 6.2% according to the Society of Motor Manufacturers and Traders. Less than 900,000 cars were built on British shores in 2021 down from 1.7 million in 2017. The microchip shortage and pandemic have been key factors in the more recent decline. Revenue and volumes are expected to fall by a further 8.5% for 2021-2022. The UK Postal market has been contracting for over a decade. Since 2012 volumes have fallen by over 42% to 11.2 billion items in 2020-2021. The rise of email communication, social media marketing and e-commerce platforms has reduced critical dependency on mail. In stark contrast, the courier industry has seen an unprecedented increase in demand.
A Cautionary Note
Just because an industry is falling does not mean it is failing. Necessity is the mother of invention, and for that matter reinvention. A change in consumer values could see contracting industries return to growth. Science is already finding other uses for coal away from combustion. UK Car producers are combating the economic and environmental barriers, and the UK Postal sector has long been working on other revenue streams. No matter if your business is having growing or hunger pains, get in touch with Advocate to see how we can help you. It’s not just debt recovery, it’s pain management too!