Small firms tell of skilled workers shortage

CONFIDENCE among small businesses in Scotland is significantly lower in the current quarter than it was a year ago, although it has picked up since the opening three months of 2015, a survey has revealed.

And one in three small businesses north of the Border reported that the availability of skilled staff was a worry in the latest quarterly survey published today by the Federation of Small Businesses (FSB).

Meanwhile, a separate survey of members of the Scottish Building Federation trade body reveals that confidence in the construction sector north of the Border is the strongest since comparable records began in 2008.

The FSB’s Scottish Small Business Index, which measures confidence, came in at +28.5 points in the current quarter. This is down 15.5 points on the reading for the second quarter of 2014. However, it is up from +20.4 points in the opening three months of this year.

The corresponding UK Small Business Index came in at +37.9 points in the latest quarter.

Subtracting the proportion expecting a fall from that predicting a rise, a balance of nine per cent of small businesses in Scotland reported growth in profits in the FSB’s latest quarterly survey.

The FSB noted that this was a relatively weak balance. However, it flagged the survey finding that a net 25 per cent of small businesses in Scotland expected profits to be higher over the

next quarter. The FSB survey found that falling fuel prices and utility bills had eased cost pressures on small businesses in Scotland.

Andy Willox, the FSB’s Scottish policy convener, said: “It is alarming that one in three Scottish small firms report that a shortage of skills could be a potential barrier to growth when there are still 163,000 Scots unemployed.

“Extra effort must be applied to tap the potential of the smallest businesses.”

He added: “Small firms especially value soft skills. We’re often looking for people with the right atti- tude, not just the right cer tificates. We need people who can manage t hei r own time and work comfortably with customers and colleagues. Educators alone can’t solve this problem – the business community has a big role getting young people ready for the world of work.”

The rise in confidence among construction sector employers’ about their prospects for the next 12 months, revealed in the latest quarterly Scottish Building Federation survey means there have now been eight consecutive positive readings for optimism from firms in the industry.

However, the trade body expressed concerns that employment in the industry was lagging behind output.

Construction companies in Scotland meanwhile highlighted apprenticeships as a top priority for future grant funding within the industry in the UK.

Vaughan Hart, managing director of the Scottish Building Federation, said: “It is encouraging that employers’ confidence about their future prospects is continuing to rise. The results are particularly striking against the backdrop of recent reports that overall business confidence in Scotland has declined due to falling profits.

“In construction, there can be no doubt that margins remain very tight but there is at least a supply of new work out there now, which certainly wasn’t the case two years ago.

“As we have said before, certain sectors of the industry are faring better than others, and we are concerned that industry employment is lagging significantly behind output.”