Business resilient amid lower expectations
Recruitment challenges have also been brought to the fore once again, as firms struggle to find the right skills. This links to recent ONS data released this week, which seen vacancies rise to 824,000 across the UK, the highest level recorded since equivalent records began in 2001.
The survey, produced in collaboration with the University of Strathclyde’s Fraser of Allander Institute, found broadly improving business confidence and revenue indicators across most sectors. Despite this positivity, investment levels have softened in sectors which had a challenging first quarter, such as retail and tourism.
Persistent recruitment difficulties are believed to be the cause of increased pay levels for staff.
- 2018 off to a strong and positive start with confidence and investment rising as firms seek to increase productivity
- Only 15% of firms across the sample reported declining optimism, suggesting resilient business confidence.
- 48% of firms reporting increased overall revenue, with only 18% reporting a decrease.
- 89% of firms have increased or maintained levels of investment relative to the previous quarter.
- Roughly a fifth of firms reported declines in both cashflow and profitability, with the vast majority of businesses observing stability in these areas.
- Recruitment difficulties rising across sectors, in addition to the proportion of businesses seeking to increase wages.
Neil Amner, chairman of the Scottish Chambers of Commerce Economic Advisory Group, said: “The results for the second quarter of 2018 continue to illustrate, that whilst Scottish firms may be cautious, the economy, particularly in financial and businesss services, is maintaining levels of resilience in an uncertain policy environment.”
Professor Graeme Roy of the Fraser of Allander Institute, said: “The outlook for the Scottish economy for 2018 is still one of cautious optimism. We expect, reinforced by the findings of this survey, that the Scottish economy will pick up through 2018 and record faster growth than 2017.
“However, uncertainty about the terms of the UK exit from the EU continue to make business planning and investment decisions difficult, and acts as a general headwind on growth.”