Survey reveals lack of confidence in country

MANY businesses in this region say they are ‘not confident’ in the economic outlook of Scotland.

Just 35 per cent of those surveyed in the South of Scotland reported feeing confident in the country’s prospects, while 63 per cent were not.

In addition, half of businesses said their confidence had decreased over the past six months, 45 per cent said it had stayed the same, with four per cent reporting an increase.

They were taking part in the latest South of Scotland Business Survey for the South of Scotland Enterprise (SOSE).

It involved 600 firms and provides a temperature check of business confidence and helps identify challenges and opportunities.

Issues emerged around workforce and recruitment, with over two thirds of firms saying workforce was a ‘significant challenge’, citing recruiting staff as a top concern, then the cost of labour and the ability to pay competitive wages.

The report states: “Most businesses were experiencing at least one significant challenge. The top cited issues were the increased cost of doing business, changing regulations, and reduced demand. As a result of these challenges, just over half of businesses were increasing prices.

“Meanwhile the main reported impacts of the significant challenges facing businesses were delaying/postponing increases to staff wages or benefits and delivering new capital projects/investments.

“The top three aspects of finance of most concern were cashflow, lower or no profit margins and inflation. The top three cost increases cited as having the biggest impact on businesses were business rates, taxation and insurance, electricity and/or gas, and staff costs.”

However, there was still some optimism around performance with 61 per cent of businesses reporting that profit margins had either increased or remained the same, while just over a third said theirs had decreased.

Of the companies who reported to be performing well (31 per cent), the most commonly cited reasons were increased demand, followed by efficiency improvements, and having made cost savings.

SOSE bosses also note the survey has highlighted the resilience of the region’s business community.

Almost half of all participants said they were striving for growth; and over the past six months, 71 per cent stated that their sales or turnover had either increased or remained the same.

Commenting on the results, SOSE chief executive Jane Morrison-Ross said: “Businesses and social enterprises across the South of Scotland remain ambitious, resilient and firmly focused on growth, even in the face of a challenging economic climate.

“The latest South of Scotland Business Survey reinforces this strength, highlighting the continued commitment of business leaders to creating opportunities for graduates and apprentices — a vital investment in the future of our region.

“We recognise the external pressures businesses are navigating, and we remain steadfast in our commitment to work closely with partners to unlock value and provide meaningful financial and non-financial support.”