Small business confidence waning across Scotland

Published on Friday 25 July 2008 21:32

CONFIDENCE among Scotland's small businesses has fallen for the fifth quarter in a row, according to figures released yesterday by Bank of Scotland.

The bank's small business confidence index, which measures optimism across five key economic measures, fell from 43 in the first quarter of the year to 37 in the second quarter.

But Scottish business confidence remains higher than the average figure for Great Britain, which stands at 34.

The index – which questioned 1,000 owners and senior executives of businesses with an annual turnover of up to 1 million – collates opinion on five issues: general economic conditions; customer demand; recruitment intentions; predicted turnover growth; and anticipated ease of running a business.

More than 80 per cent of Scotland's small business owners expect economic conditions to worsen over the next 12 months – more than double the number expressing a pessimistic outlook this time last year.

Russel Griggs, chairman of the CBI's small business council, said: "In general, times are tough, especially for financial services, house builders and for the big retailers. But when you talk to manufacturers, demand is holding up. There's enough resilient demand to make people think that things might get better."

Colin Borland, from the Federation of Small Businesses Scotland, said: "It's not surprising people are apprehensive because it's going to be a pretty tough year ahead.

"But it's not all doom and gloom – Scotland is slightly better placed to deal with these economic circumstances. We're a small business economy that can react more quickly to adverse market conditions.

"A recession is not inevitable and we're certainly not in one."