Scots firms urged to think long term as confidence reaches record low in June

Scottish business confidence fell to a record low in June, according to the latest Accenture and S&P Global UK Business Outlook report – with firms being encouraged to shine a spotlight on their long-term strategies.

A net balance of +17 per cent more private sector firms north of the Border have forecast their activity to increase over the coming year, according to the study.

The figure is half the level recorded in February and is now weaker than most other regions in the UK, with the South-east (excluding London) being the most confident (at 43 per cent), the report found. However, Scotland was ahead of the EU average of +16 per cent, with the UK as a whole recording +28 per cent.

Expectations for profits north of the Border have fallen into the negative (to -4 per cent) for the first time, and plans for recruitment have also dipped (from 14 per cent to 1 per cent) over the four months from February to June, due to rising inflation fuelled by increased energy costs.

Optimism was found to be strongest across the financial services sector, with capital expenditure up 5 per cent and research and development up 2 per cent.

David Caskie for Accenture in Scotland said: “Business confidence here in Scotland, like in the rest of the UK, has clearly been knocked by mounting concerns around inflation, pressure on profits, and economic uncertainty.

“This is a time to look long term and invest where possible... ensuring that the right investments and strategies are in place to emerge from this period of uncertainty in the strongest position to take advantage and market share going forward.”