Scots SMES stage revival in Q2

The health of smaller Scottish businesses improved in the second quarter as confidence hit a three-year high, according to new research.

CYBG’S SME (small and medium-sized enterprise) Health Check Index in Scotland for Q2 increased by four points to 40.

The index is designed to measure the performance of SMES along with the business and macroeconomic environment within which they operate.

The report, in partnership with the Centre for Business and Economics Research, cited the confidence indicator hitting a three-year high of 57 as a primary factor in driving the index higher. The GDP indicator also rose, up seven points to 52. However, Scotland’s overall index lagged behind the UK average, which remained flat at 47, the secondlowest level in three years.

The employment indicator north of the Border, which dropped nine points to 42, was also lower than the national average at 66.

Nationally, key data showed the economy regained some momentum,thankstoadverse weather at the start of the year disrupting business activity and pushing it into Q2, particularly in the construction sector, the report said.

Gavin Opperman, group customer banking director at CYBG, said: “The latest SME Health Check Index demonstrates just how much can change for SMES quarter to quarter.

“Our last report indicated a difficult start to 2018 and the weather conditions didn’t help matters, but the second quarter does provide some grounds for optimism.”

Opperman cited GDP gains as an early sign that the UK economy could be on the road to recovery, but that there were still factors indicating cause for concern. He added: “Employment growth is down, due to a tightening in the labour market, and, most important for us, lending has not improved.”