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Confidence rising

One in three Scots to work at home though output dips

home working

Home working is now permanent for 10% of employees

One in three office-based employees in Scotland will continue to work from home for at least part of the week post-pandemic in a major shift in employment patterns.

The transition to more home working will become more established even though firms say it has negatively impacted on productivity.

Just over 34% of businesses either have or will permanently reduce their office footprint.

In the long-term, businesses expect that almost two in three staff who previously only worked in the workplace will continue to do so. More than one in five will work part-time at home and part-time in the workplace, and about one in 10 staff will work from home full time. 

The data emerges in the latest Addleshaw Goddard Scottish Business Monitor report which found that of 500 firms quizzed 60% reported that Brexit had no impact on their ability to find staff, even though half had vacancies, of which 77% said they were finding it difficult or very difficult to fill.

Accommodation & food services was the sector reporting the most difficulty in filling vacancies due to Brexit, with 60% reporting negative impacts. This was followed by IT & Communications (46%) and Professional, Scientific and Technical (43%).  

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Just under half (42%) of businesses said their debt burden had increased during the period of the pandemic; 12% of reporting businesses said that their debt had decreased during the period of the pandemic, with 1 in 4 business saying that it had decreased by a large amount, and 55% reporting a moderate reduction. 

Business activity has risen in Scotland as the wider economy continues to reopen.

The Business Monitor report – published in partnership with the University of Strathclyde’s Fraser of Allander Institute – indicates that businesses are optimistic about their volume of business, employment levels and turnover over the next six months.

The proportion of businesses which confirmed they have somewhat or very high confidence that they will continue trading through the next six months, has risen from 82.6% in the final quarter of 2020 to 91.8% in the second quarter of 2021.

Accommodation and food services have reported positive sentiment over the quarter for the first time since Q3 2019 and expectations for over the next six months are the most optimistic since Q2 2014. 

Firms trading with the EU are also continuing to feel the aftermath of Brexit, as 70% reported that they were experiencing a negative impact on their trade with the bloc since the end of the transition period, and only 2% reporting positive impacts. 

The number of firms reporting an increase in their volume of business over the past three months was positive for the second quarter in a row, with many firms experiencing growth since the first quarter of 2021.

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All sectors now have a positive net balance for the first time since Q2 2019.

The accommodation and food services sector reported the biggest increases with 54% of firms reporting a higher volume of business than the first three months of the year and only 8.3% reporting lower volume.

Half (51%) of firms now expect to operate at normal or above normal levels of capacity over the next six months.

Mairi Spowage, director at the Fraser of Allander Institute, said: “Businesses are aware that, with complications beyond the pandemic including the UK’s withdrawal from the EU, there will still be hurdles to overcome.

“That said, the latest results underline the positive direction in which we’re moving towards a strong economic recovery.”

Addi Spiers, restructuring and finance partner at Addleshaw Goddard, said: “Recruitment and retention of staff remains a top priority for all sectors and movement in the market will continue well into the new year as firms pivot to new, more flexible ways of working –particularly as most adopt long-term hybrid working models.”

Addleshaw Goddard and the Fraser of Allander Institute will launch a report highlighting the transport sector’s outlook as a continuation from the Scottish Business Monitor results, later this year.



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