The latest Scottish Chambers of Commerce’s (SCC) quarterly economic indicator report found that in the wake of the EU referendum, businesses again reported weaker trends in both performance and optimism than last year. Although the picture of employment is generally positive, recruitment difficulties are widespread.
The survey came as latest GDP figures showed that growth in Scotland’s economy – excluding oil and gas – continues to lag that of the UK with a rise of 0.4 per cent in the second quarter, compared to UK-wide growth of 0.7 per cent.
Neil Amner, chairman of the SCC’s economic advisory group, said the underlying challenges facing a broad spectrum of businesses were around lower expectations of profitability and tightening margins which are affecting the investment.
“This is a clear reason why our UK and Scottish governments must use the opportunity presented by the autumn statement and Scottish budget to deliver a clear commitment to investing for growth and to lowering the costs of doing business.
“With the Chancellor indicating a softening of austerity, room must be created for reductions in taxes, for example, VAT to boost consumer spending or to incentivise our tourism industry, or, in the Scottish Government’s case, business rates, to tackle the core fixed costs of doing business.”
Although the survey found that Scottish businesses are continuing to take on more staff, recruitment difficulties are being reported across a range of sectors.
“This underlines the need for business to have access to the widest possible pool of talent,” said Amner.
The SCC said it will oppose any plans from the UK government to restrict access to international talent through the tightening of post study work options.
The latest report covers five business sectors including construction, manufacturing and financial services and is compiled with the Fraser of Allander Institute.