Scottish firms tested by 'cost-of-doing-business crisis' as exports falter
Scottish business resilience is being tested by the “cost-of-doing-business crisis” while low levels of export activity and investment remain a concern, a report today finds.
Launched in 1998 and now in its 25th year, the Scottish Business Monitor is one of Scotland’s key measures of business sentiment and activity. The quarterly monitor is compiled by the Fraser of Allander Institute and is produced in partnership with legal firm Addleshaw Goddard.
In celebration of 100 business monitors, the institute has published an analysis of the past 25 years, highlighting how Scottish firms have coped with significant changes in the economic landscape. The latest findings show that business sentiment fell to a 25-year low at the start of the pandemic in 2020, significantly lower than that felt during the financial crisis. While exporting levels have recovered since the lowest rate recorded by the monitor in 2020, the net balance of firms reporting an increase in current and expected export activity remains well below zero as of Q4 2022.
Mairi Spowage, director of the Fraser of Allander Institute, said: “Scottish firms have had to weather a number of storms over the past 25 years, and their resilience is once again being tested as they navigate through the current cost-of-doing-business crisis. Concerningly, our latest findings show consistently low levels of export activity and business investment, which are key drivers of productivity. While business resilience has been shown time and time again, Scottish businesses need support to secure longer-term business and economic growth.”
Alan Shanks, head of Scotland at Addleshaw Goddard, added: “The Scottish Business Monitor launched in the same year I began my legal career and having worked closely with Scottish businesses of all sizes throughout this period I have seen first-hand the collective strength they have shown. The Scottish business community will need to show continued resilience to deal with the numerous uncertainties currently facing it.”
Meanwhile, Scottish Engineering’s first review of 2023 shows the sector’s overall upbeat mood continues in line with an eighth consecutive quarter of order and output growth. However, the latest report also highlights the staffing and skills challenges being faced by many businesses.