Company bosses tap cheap money
Confidence slumps among small firms
Echoing a survey from Lloyds Bank, new figures from the Federation of Small Businesses (FSB) show that businesses became more pessimistic in every part of the UK in the wake of the Brexit vote.
However, the report also reveals that many Scottish firms plan to tap cheaper credit now available to deliver postponed investment plans.
The organisation’s Scottish confidence index fell to -18.8 points in the third quarter of 2016, down from +1.7 points this time last year.
The UK figure also fell into negative territory this quarter to -2.9 points, compared to +20.3 points in the third quarter of 2015.
Despite this anxiety amongst business owners, a net balance of 24% of Scottish firms plan to increase capital investment over this quarter, while firms report the best credit conditions since the study began in 2012.
Andy Willox, FSB’s Scottish policy convenor, said: “These figures show that Scottish small business confidence fell following June’s referendum.
“However, a majority of Scottish businesses have been pessimistic about business prospects for the last nine months – with pressure on Scotland’s service sector and the decline of the oil and gas industry at least partially to blame.
“While cheaper credit is encouraging firms to get on with postponed investment, there’s a lot of work to be done to restore long-term confidence.”
As part of the research, Scottish firms highlighted the state of the domestic economy as the biggest barrier to growth – ahead of other big issues like consumer demand and skills shortages. The study also shows very subdued hiring intentions amongst Scottish firms for the remainder of the year.
Mr Willox said: “Businesses in Scotland and elsewhere in the UK are worried about where the economy is going. We expect those steering the country to do their utmost to provide clarity and support for Scottish smaller firms.”