THE recent surge in inflation has taken a toll on confidence levels among Scotland’s small businesses amid concern about the outlook for the economy sectors leaders have warned.
A survey by the Federation of Small Businesses in Scotland found that while confidence levels increased in the first quarter compared with the preceding three months firms were less optimistic than they had been in the same period last year.
The findings highlight the scale of the challenges posed for small businesses by the sharp increases many have faced in the cost of fuel and other essentials.
FSB noted that during the first quarter of 2021 many shops and all hospitality businesses across mainland Scotland were forced to stay closed because of lockdowns imposed amid the pandemic.
Andrew McRae, FSB’s policy chair for Scotland, said while conditions are much better than during the darkest days of the pandemic the survey results showed many businesses are still worried about what comes next.
He noted: “Evidence is mounting that Scotland’s business community is being squeezed by rising costs. But few firms feel that they can pass on this pressure to their customers.”
With local elections due to be held across Scotland on May 5, Mr McRae said councils must do what they can to help small businesses.
“While no government can reduce inflation single-handed, they can avoid heaping on more pressure,” said Mr McRae. “Councils can, for example, freeze rents on their commercial properties and their fees and charges in areas such as waste, licensing, and planning. They can also postpone and cancel new taxes on local businesses and their customers.”
FSB’s Small Business Confidence index for Scotland rose to 14.3 points in the first quarter, from -22 at the end of last year. The reading was 18.8 in the first quarter of 2021.
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The FSB survey found nine in ten (88%) of Scottish business owners had seen their running costs increase over the last three months. Two fifths (41%) said they had increased by more than 10 per cent.
The survey covered 1,211 business owners.
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