Scotland's small firms have '˜confidence gap' with UK

A growing 'confidence gap' is emerging between Scottish small businesses and their counterparts elsewhere in the UK, a new report has shown.

A growing 'confidence gap' exists between Scottish smaull business and their counterparts in the rest of the UKPicture: David Davies/PA Wire

Latest Federation of Small Businesses (FSB) statistics found confidence levels in Scotland fell by more than ten points between autumn and the end of 2016, from -18.8 to -28.9.

UK-wide, small business confidence has grown, climbing from -2.9 points to 8.5 points in the same period.

The fall in Scotland continues an 18-month decline and the domestic economy is highlighted as the top concern for companies, with 55 per cent citing it as a barrier to growth.

Problems recruiting skilled staff and low consumer demand were also seen as restricting growth. Overall, a net balance 11 per cent of Scottish firms reported reduced staff numbers.

Just under half of 144 Scottish firms responding to the study (46 per cent) said their profits fell in the last quarter of the year while 27 per cent said profits were up, leaving a 19 per cent net balance of Scottish firms with declining profits, compared with 3 per cent UK-wide.

The report states: “While other parts of the UK experienced a resurgence in small business confidence in the last quarter of 2016, Scotland’s firms present a far more pessimistic outlook.

“The Scottish economy may be in for a challenging 2017. A general lack of certainty, both politically and with regards to the future economic environment, is also hampering firms.”

Scottish Conservative shadow economy secretary Dean Lockhart said: “In times of uncertainty, the Scottish Government should be doing all it can to help businesses of all sizes.

“But, instead, it continues to hang the threat of independence over companies who just want to know what the future has in store.”

A Scottish Government spokesman said: “Brexit is by far the biggest threat to Scotland’s jobs, prosperity and economy. That is why we have always been clear that remaining in Europe- and keeping our existing place in the world’s largest single market of more than 500 million people - is the best option for our future.”