CONFIDENCE among Scotland’s small businesses fell again in the final quarter of 2022, and only about one-third of them expect to grow in the next year, a key survey shows.
The Federation of Small Businesses’ confidence index for Scotland dropped to -50 in the final three months of last year, from -45 in the preceding quarter. It is way below its -22 level in the final quarter of 2021.
The FSB noted the latest reading was the lowest outside of Covid-19 lockdown periods.
Andrew McRae, Scotland policy chair of the FSB, said: “Scotland’s small business community has endured an unprecedented sequence of challenges over the last two-and-a-half years: rising inflation, increasing energy prices, and staff shortages to name a few.
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“The constant battle to just survive during this cost-of-doing-business crisis means it is no surprise that confidence levels are now at their lowest on record, outside of Covid lockdowns.”
He added: “Small business owners are a steadfast bunch and keep swimming against the tide of economic uncertainty. But they need help to keep their heads above water. It is therefore vital that governments in Holyrood and Westminster focus on support and stability by pausing the introduction of new regulations, supporting sectors most in need and reconsidering the energy cost support on offer after March.
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“This refocusing would help develop an operating environment with, if not certainty, then at least less turmoil, and an environment where small businesses can survive, and even thrive, and drive the economic growth needed to get the economy back on its feet.”
Separately, the latest Addleshaw Goddard Scottish business monitor report showed the cost-of-doing-business crisis remains the overriding concern for firms north of the Border.
Around 90% of businesses have seen their costs increase over the past year, many by more than 50%, and the price of energy continues to have a significant impact on activity, with almost half of the businesses expecting to reduce their operations this year due to higher energy bills, the survey of about 400 firms found.
Meanwhile, a survey by the Institute of Chartered Accountants in England and Wales showed business confidence in Scotland has fallen to its lowest recorded point for 14 years. ICAEW’s business confidence index reading for Scotland was -27.8, the lowest score since 2009, and second-weakest among UK nations and regions behind Yorkshire and the Humber.
David Bond, ICAEW director for Scotland, said: “As our companies grapple with tough economic conditions and political turbulence, they must still contend with financial and labour market challenges."
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