CONFIDENCE is high among Scotland’s digital technologies companies as they look ahead to the rest of 2018 with optimism over sales, profits and international growth, research has found.

Around 80 per cent of respondents to 13th annual Scottish Technology Industry Survey expect a positive year, with nearly one-third forecasting increases in sales of more than more than 50 per cent. Rises in employee numbers were also expected by 80 per cent of companies, up from 66 per cent in 2016. According to the survey conducted by ScotlandIS, the trade body for the digital technologies industry, 68 per cent of businesses recorded improved sales during 2017 compared to the previous year.

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Increased profit margins were reported by 47 per cent of respondents for 2017, only one per cent less than in 2016.

Key challenges highlighted were staff recruitment and retention, developing new business and the current political situation. Staff recruitment concerns grew by nine per cent. Changes to regulations, such as the introduction of new data privacy regulations, emerged as a new challenge increasingly cited by respondents.

International markets remain a key focus for Scotland’s digital companies with 64 per cent already exporting and a further 17 per cent planning to do so. The top three export markets remain the rest of the UK, Europe and North America, but Europe has replaced the rest of the UK as the top destination for exporters.

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ScotlandIS chief executive Polly Purvis said: “The survey provides an important snapshot from those at the coal face in the industry. This year’s survey shows that Scotland’s digital technology industry is thriving, with many of our businesses enjoying success at home as well as experiencing increasing overseas demand.

“The overwhelming majority of respondents are optimistic about the year ahead and are forecasting business growth. This is good news not just for our industry but the country as a whole as more jobs are created and investment increases across the sector. As in previous years, there are significant concerns over staff recruitment and retention and to a smaller extent about the impact of Brexit.”