Scottish firms keep a tight grip on the purse strings

Scottish companies remain uncertain about their spending plans for the coming year, with lingering doubts about the speed and timing of economic recovery the main barrier to investment.

Just over one in five Scottish firms questioned in a poll by Clydesdale Bank said they planned to plough at least 10 per cent of their turnover back into their business during the coming 12 months. However, nearly one-quarter have nothing earmarked for commercial growth opportunities.

Half plan to spend at least 6 per cent of turnover - a low rate of investment by historical standards. Scott McKerracher, regional director for Clydesdale in Scotland, said: "There results indicate the majority of businesses are planning a relatively conservative spend in the next 12 months."

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With more than half of firms having delayed either salary increases or recruitment during the past year, the hiring of new staff is one of the main investment priorities for the coming 12 months. This is followed by the need for new equipment or the expansion of premises, the survey revealed.

Compared to the rest of the UK, Scotland's companies lag behind London, the north-west and the south-west of England in investment intentions.