Business confidence remains challenging, says ICAEW

Business confidence in Scotland remained negative for the fourth successive quarter between 26 October 2016 and 20 January 2017, the latest study from accounting body ICAEW has shown.

ICAEW Scotland president Andrew Hewett said there were signs of improving optimism. Picture: Contributed

Although Scottish businesses recorded a confidence score of minus 5.1 for the latest quarter, that marked an improvement on minus 11.9 seen in the previous three months.

ICAEW Scotland president Andrew Hewett said: “While it is always a concern that confidence remains in negative territory, it is somewhat encouraging to see it improving over the last few quarters – albeit slowly.

“There is no doubt that some uncertainty remains amongst business professionals in Scotland, but the fact that there is a degree of optimism over the outlook for the coming 12 months, suggests that there is a belief that things have the potential to improve.”

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The ICAEW report said confidence had also been affected by input price inflation rising 1.9 per cent in the past 12 months versus 0.3 per cent a year ago, driven by the double-digit fall in the value of sterling.

It added that firms were now “looking to pass on some of these higher costs” in the coming year, with 17 per cent of businesses in Scotland seeing this as an issue.

More positively, Scottish domestic sales rose 2.4 per cent over the past year and are expected to rise 3.4 per cent over the coming 12 months.

“Predictions for the year ahead also look rather bullish for exports”, with growth of 4.9 per cent anticipated,” the report said.

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