SALES and profits in Scotland outstripped the UK average in the final quarter of last year, the latest figures have shown.
Scotland bucked the UK trend of slowing domestic sales growth with an annual rate of 5% reported in fourth quarter versus a UK rate of 3.6%, with the higher rate expected to continue in the coming year.
Export sales in Scotland were also up on the year before and are set to grow at a faster pace than anywhere in the UK.
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As a result of rising selling prices and strong domestic sales, Scottish businesses achieved profits growth of 3.3%, outstripping the UK average.
Again, this looks set to continue with profits growth expected to reach 5.3% in Scotland over the next 12 months compared to 4.6% for the UK.
Scottish firms also said they expected salary and employment growth in the year ahead to be among the highest in the UK.
However, as measured by the business confidence monitor produced by the ICAEW accountancy body, sentiment in Scotland fell to 2.0 in the final three months of 2023, down from 6.4% in the previous quarter.
This suggests Scottish firms are less confident about their prospects than those elsewhere in the UK.
The ICAEW also said Scottish companies reported a growing number of challenges.
The majority of businesses said they were struggling with consumer demand, although those concerns eased in the fourth quarter and the issue is more prevalent elsewhere in the UK.
Cost pressures are set to reduce in the coming year, although at a slower rate than the UK average.
Overall, capital investment spending in Scotland in 2023 was among the highest in the UK, and is set to grow faster than anywhere else over the coming year.
Firms in Scotland continue to raise their research and development budgets and, although this is expected to moderate in the coming year, the projected rate of increase keeps Scotland among the top performers in the UK.
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ICAEW director for Scotland David Bond said: “With economic concerns continuing to weigh on Scottish businesses, the business confidence monitor presents a mixed picture, with sentiment down although still positive, and strong sales and profits growth which is set to continue.
“Nevertheless, Scottish companies say they face a range of challenges, with the majority of our firms devoting too much time and energy to regulatory requirements.”
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