Scottish small business confidence falls again as cost of doing business crisis bites
Scotland’s small business confidence fell again in the third quarter of 2022, latest figures from the Federation of Small Businesses (FSB) show.
The small business group’s Quarter 3 Small Business Index (SBI) now sits at -45.7% for Scotland, down on the -31.8% reported the previous quarter. It is also significantly lower than the same quarters in 2021 (+1.2%) and 2020 (-26.3%).
The equivalent UK-wide confidence figure is -35.9%, which is also down on the previous quarter (-24.7%), but 9.8 points ahead of Scotland.
The SBI also shows that nine out of every ten businesses (90.7%) have seen costs increase over the last 12 months, with increases in fuel and utilities the most common drivers.
As wider inflationary pressures bite, almost half of those surveyed in Scotland (46.9%) expect to have a decrease in revenue over the next 12 months. As last quarter, over one in six (17%) businesses have indicated that they may shrink, sell or shut over the next 12 months.
Andrew McRae, FSB’s Scotland Policy Chair, said: “Scotland’s small business community has endured two and a half very difficult years and is now battling against the added threats of rising inflation, increasing energy prices and staff shortages, to name a few.
“Never underestimate the tenacity and determination of small business owners to triumph against the odds. But these aren’t so much economic headwinds, as a force 10 gale.
“And, again, we see that at least one in six business owners are thinking of shrinking, selling or shutting their operations – a figure unchanged from last quarter.
“The recent political and economic turmoil is clearly having a real-world impact. That’s why it’s vital the UK Government focuses on stability, including delivering on its promises to help with energy bills for small firms and reverse the hike in National Insurance. Those saving must be in the pockets of small firms by next month, followed by clarity on what will happen to energy deals after the initial six-month period.
“At the same time, there will be opportunities in the Scottish Government’s budget, due by the end of the year, to protect small firms and free them up to drive growth, which we’ll be exploring in the days and weeks ahead.”