Confidence in Scottish businesses ‘on the rise’

Though businesses will be keeping an eye on developments after new devolution powers are implemented. Picture: Alex Hewitt
Though businesses will be keeping an eye on developments after new devolution powers are implemented. Picture: Alex Hewitt
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BUSINESS conditions in Scotland are improving, according to a survey of chartered accountants.

The latest business confidence monitor shows Scottish businesses recorded a confidence score of 22 between July and October, up from the previous quarter.

A total of 60 chartered accountants were asked how they would describe their confidence in the economic prospects facing their business over the next 12 months, compared to the previous 12 months.

They scored zero for stating “as confident”, positively up to 100 for more confident, and negatively down to -100 for less confident, with an average score calculated from all the responses.

Only 21 per cent of respondents said marketplace competition is a greater challenge than a year ago.

Turnover is reported to have increased by 5.5 per cent in the last 12 months, with gross profits up by 4.9 per cent. Both of these growth rates are faster than those seen over 2013. Similar growth rates are expected in the year ahead.

Scotland’s confidence rating is still below the UK average of 28.6.

The business monitor is conducted by the Institute of Chartered Accountants in England and Wales (ICAEW) and Grant Thornton UK.

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ICAEW Scotland president Paul Adderley said: “It is encouraging to note that Scotland is seeing an increase in confidence this quarter; both past and projected performance suggest a positive outlook for the year ahead.

“Factors such as an increase in average total salaries over the past year support this and - combined with a drop in UK consumer price inflation - mean that for some staff at least, salaries are starting to rise in real terms for the first time since the 2008-09 recession.”

Grant Thornton UK’s managing partner in Scotland, Kevin Engel, added: “The latest data highlights a welcome return to sustainable growth. The independence referendum and much of the debate that has followed will inevitably create some uncertainty. But, the outlook appears to be positive with wage and employment growth.

“The main focus for much of the business community will now be the further devolution of powers to Holyrood and any potential impact this may have. Businesses are looking for certainty and clarity from political leaders. With proper consultation and collaboration, the outlook should remain positive.”

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