Small business owners throughout Scotland are among the gloomiest in the UK, with a majority expecting conditions to deteriorate in the coming months, a survey reveals today.
Figures released by the Federation of Small Businesses (FSB) found nearly two-thirds of its Scottish members are concerned about the sluggish domestic economy, and see this as a major barrier to growth. The survey, conducted prior to the Chancellor’s Budget statement earlier this week, also found that confidence throughout the UK is at its lowest for nearly three years.
Andy Willox, Scottish policy convenor for the FSB, said SMEs are facing various headwinds which led to lower revenues and profits during the latest quarter.
“Scottish firms whose prospects are indirectly or directly allied with the state of the oil and gas industry are of course facing gruelling trading conditions,” he said. “But the pressures on the massive services sector are also taking their toll. This could explain why Scottish confidence figures lag behind even the depressed numbers for the UK as a whole.”
The findings come ahead of expected appearances today by leaders from Scotland’s main political parties at the FSB’s annual conference in Glasgow. First Minister Nicola Sturgeon, Labour shadow chancellor John McDonnell and Scottish Conservative leader Ruth Davidson are due to address more than 1,200 small business owners at the SECC.
Each is expected to outline their party’s plans to support the 359,000 SMEs that account for more than 99 per cent of all private firms north of the Border. Today’s meeting – the second of the FSB’s three-day conference – will be one of the first significant political skirmishes to win over the business community ahead of the Holyrood elections in May.
“We need to create the right conditions for more local, small and micro-businesses to establish, grow, employ and invest,” Willox added. “The next Scottish Government must spend wisely, tax fairly and regulate sensibly.
“With less than two months until the Holyrood elections, we need to hear how Scotland’s political parties plan to boost local economies whatever the price of Brent crude.”
The confidence index in Scotland during the latest quarter stood at -2, down from +20.4 at the same point a year ago.
Although profits and revenues were down, firms are predicting improvements. On a further positive note, investment intentions held steady and credit conditions continue to improve.
But the FSB also found “strong indication” that a raft of new obstacles may also be contributing to the decline in business sentiment.
Sandra Dexter, vice-chair of the FSB, said these include challenges such as the national living wage, pension auto-enrolment and plans to introduce mandatory quarterly digital tax reporting.
“Small business confidence has clearly faltered,” she said.