Warning over effect of ‘election-style’ policy-making
SCOTTISH business confidence is at “worryingly low levels”, with companies in a period of “stasis” as global and domestic factors including Brexit-related uncertainty weigh on optimism and investment, a key survey shows.
The survey, published today by Scottish Chambers of Commerce and conducted in partnership with the University of Strathclyde’s Fraser of Allander Institute, shows falling confidence in manufacturing, retail and tourism.
It reveals investment levels remain weak across all sectors in the survey, which also covers financial and business services, and construction.
Scottish Chambers says: “This has been an ongoing trend as global and domestic uncertainty continues to take its toll on business communities.”
The survey shows continuing falls in orders and sales revenue for manufacturers in Scotland in the fourth quarter of 2019, with declines on both the domestic and export fronts.
Tim Allan, president of Scottish Chambers, said: “The decisive election result at Westminster is yet to provide the clear direction that business communities are looking for. Of particular concern to businesses will be the extent of divergence the UK Government plans to adopt between UK and EU regulation. This continued uncertainty, coupled with a continued sense of ‘electionstyle’ policy-making, has the potential to disrupt business planning [and] supply chains, as well as negatively impacting on job creation.”
Graeme Roy, director of Fraser of Allander, noted any immediate threat of crashing out of the EU with no deal had been removed, but observed: “The decisive end-point for agreeing an all-important trade deal is less than 12 months away.”
He added: “Recent reports that the UK Government will seek to pro-actively diverge from EU rules and regulations are worrying – firstly because such alignment is crucial for so many firms and secondly because it reiterates that the politics of Brexit appear to still drive decision-making rather than what is best for business or the wider economy.”