Firms ramp up investment as confidence turns positive

● But latest SCC survey highlights challenges ahead ● Comes as figures reveal increase in corporate failures

Scottish businesses are ramping up investment as confidence in the economy rebounds, a key survey published today reveals.

The latest Scottish Chambers of Commerce quarterly economic indicator found that while some sectors remain fragile in terms of overall business confidence, firms are looking to invest in capital and training to improve their prospects despite an “uncertain economic environment”.

Construction remains an area of concern, the survey noted, with overall revenues down, alongside a fall in public-sector orders. However, there are some “encouraging signs” for the sector, with private commercial orders up significantly, and key financial indicators such as cashflow and profitability returning to positive levels.

Meanwhile, Scotland’s crucial retail and tourism sectors also continue to face what were described as “challenging domestic conditions”.

Neil Amner of Anderson Strathern, chairman of the Scottish Chambers of Commerce 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.

“This upswing in investment trends does not come without expectation. Every sector in our report, from construction to tourism, expects to see sales revenues increase in the second quarter, with firms anticipating that this investment will gain rapid returns.”

Graeme Roy of the Fraser of Allander Institute, which collaborates with the SCC on the survey, said: “As we have previously highlighted, in times of uncertainty, it is important that businesses focus on the drivers of growth that they can control such as investing in their own productivity and efficiency, and in developing the skills of their workforce.”

The survey comes a day after it emerged that Scottish business failures had risen by more than a third in the first three months of 2018.

The total number of business insolvency appointments increased by 38 per cent to 233, compared with the same three months in 2017. However, experts said the outlook remained positive.

Blair Nimmo, KPMG’S global head of restructuring, said: “While insolvencies increased in Q1 compared to the same period last year, the statistics don’t reflect the wider picture. The end of 2017 saw insolvencies at an eight-year low.” Legal firm Thorntons is strengthening its footprint in Edinburgh with new premises and a partner appointment. The practice will move later this year from its current Melville Street base to larger offices in Citypoint, Haymarket. Meanwhile, Chris Phillips (pictured, centre, with Thorntons chairman Colin Graham and colleague Noele Mcclelland) has joined the firm as a partner and a member of the employment law team in the city. Thorntons opened in Edinburgh in 2004.