SCOTTISH businesses are investing in capital and training to improve their prospects in an uncertain economy, according to a new survey.
The Scottish Chambers of Commerce (SCC) Quarterly Economic Indicator survey found that while some sectors remain fragile in terms of overall business confidence, firms are investing more than usual to boost their chances of success.
Produced in collaboration with the University of Strathclyde’s Fraser of Allander Institute, the survey also found the construction industry remains an area of concern, with overall sales revenue down, alongside public-sector orders.
However, there are some encouraging signs for the sector, with private commercial orders up significantly, and key financial indicators such as cash flow and profitability returning to positive levels. The retail and tourism sectors also continue to face challenging domestic conditions.
Neil Amner of Anderson Strathern, chair of the SCC’s Economic Advisory Group, said: “The results of SCC’s first quarterly economic indicator of 2018 show that while the economy has not been without challenges, most sectors are reporting increasing levels of investment across capital and training. A number of factors will underlie this. Legislative change, whether through industry wide regulations such as the GDPR, or through reforms to the Business Rates system via initiatives such as the Business Growth Accelerator, is encouraging firms to upskill their staff and push forward on capital investments.
“This upswing in investment trend does not come without expectation, however. Every sector in our report, from Construction to Tourism, expect to see sales revenues increase in the second quarter, with firms anticipating that this investment will gain rapid returns.
“Although some sectors are reporting lessened levels of recruitment difficulties in comparison to previous quarters, such as financial services firms recording a drop of ten percentage points, these still remain relatively high in areas like construction.
“In terms of wider business concerns and cost pressures, certain areas remain stubbornly challenging particularly in manufacturing as the cost of raw materials reflects rising global competition. Given the limited ability of firms to pass on these costs to customers, this may also be a further reason for rising investment, as businesses look to compete on customer experience and efficiency.
“It is clear that businesses are adapting to the changing economic environment and have positive expectations for the quarter ahead. To achieve the gains that companies are anticipating, we look to policymakers to mirror the agility and adaptability shown by the private sector, particularly on areas such as increasing Scotland’s exporting performance, creating a favourable tax environment and an attractive migration policy, which meets the needs of Scotland’s economy.”
In his foreword to the report, Professor Graeme Roy of the Fraser of Allander Institute comments on the changes to business investment: “Weak business investment has been a feature of Scotland’s economy in recent times [but] the survey suggests that levels of investment have increased significantly over the last year ... It is important that businesses focus on the drivers of growth that they can control such as investing in their own productivity.”
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here