The Courier & Advertiser (Perth and Perthshire Edition)
Small business confidence slides
Scottish small business confidence fell steeply in the third quarter of the year, according to a new Federation of Small Businesses (FSB) report.
The FSB’s Scottish Small Business Confidence Index fell to -15.2 points, from -3.8 points in the previous quarter.
The average Scottish firm is still much less optimistic than its UK equivalent.
The latest UK figures show the metric at +1 point.
This is a significant drop from the previous quarter, when the index was at +14.9 points.
FSB Scottish policy convener Andy Willox said that rising costs were a reason for a reduction in business confidence.
He said: “Businesses in Scotland have been pessimistic about prospects for the last seven quarters.
“We saw a slight uptick earlier this year but, in this quarter, business confidence in Scotland and across the UK has taken a hit.
“Rising inflationary pressure and a weakening domestic economy are the twin drivers of plummeting confidence among UK businesses.
“Scottish small firms will be looking to the Chancellor to extend a lifeline at the budget.
“In such a difficult trading environment new tax grabs and loss of reliefs for entrepreneurs will exacerbate existing challenges.”
According to the study, profit margins continue to be squeezed with a net balance of 7% of Scottish smaller firms reporting a fall in gross profits.
An increased share of firms now warn input costs such as the cost of raw materials are a barrier to business growth.
Mr Willox added: “The depreciation of sterling is still having a big impact on those firms which import goods or services, or who are part of international supply chains.”
The report also highlights that although still lagging behind the rest of the UK, Scottish investment intentions have strengthened.
A net balance of 7% of small businesses in Scotland plan to increase their investment in the next quarter, up from 6% earlier in the year, but lower than the equivalent UK figure of 14%.
Mr Willox added: “The Scottish Government has done the right thing by heeding FSB’s call for an investment rates relief.
“Giving growing firms time to recoup their money before being hit with a bigger bill will go some way to helping Scottish investment intentions catch up with those south of the border.”