Scotland is the least optimistic part of the UK when it comes to business confidence, according to the Federation of Small Businesses (FSB) latest figures.
Its quarterly Small Business Index, which surveys around 1,500 small firms across the UK, revealed confidence in this sector was at its lowest level since 2013.
This quarter the UK Small Business Index stands +8.6, and confirms fears that the UK economy faces a number of challenges in the coming quarters. In Scotland, the index was down to -2.0, compared to +20.4 a year ago.
Staying with Scotland, output rose by just 0.1 per cent quarter on quarter, well below that seen across the rest of the UK, fuelled by a combination of falling output in the manufacturing sector and slowing growth in the services sector.
General UK figures revealed that eight per cent of those questioned had cut back headcount during the past three months, but on a more positive note, a further seven per cent expect to increase staff numbers in the near future.
Also during the quarter, 64 per cent of those questioned, said that general domestic economic conditions are a barrier to growing their business, a significant increase from the 49 per cent recorded in the previous quarter, and the 43 per cent in Q1 2015.
Andy Willox, FSB Scottish policy convenor, said: “Scottish firms whose prospects are indirectly or directly allied with the state of the oil and gas industry are of course facing gruelling trading conditions. But the pressures on the massive services sector are also taking their toll. This could explain why Scottish confidence figures lag behind even the depressed numbers for the UK as a whole.”
Overall, the FSB survey found a strong indication that the range of challenges facing small businesses, including the national living wage and pension auto-enrolment, could be contributing to the decline in business sentiment.
Sandra Dexter, vice chairman of the FSB, said the recent Budget had given a small lift. “Small business confidence has clearly faltered, which is why the welcome small business focus in the Budget is so important,” she said. “We need a renewed push for growth and productivity – with policy makers delivering a sustained package of support for ambitious small firms.”
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