Thousands of Scottish firms already frozen out as winter looms

3rd December 2022

An article from the Fraser of Allender Institute.

The Chancellor of the Exchequer had the unenviable job last month of striking the balance of signalling stability to markets while supporting households and businesses through the current economic crisis.

However, it appears the pandemic, Brexit, and the ongoing cost of doing business crisis have already had a significant impact on the number of Scottish firms and their activity.

The latest ‘Businesses in Scotland' data for 2022 were published last week which showed that the number of registered firms in Scotland declined for the second consecutive year.

This year, there were 175,000 registered businesses in Scotland (defined as firms that have a base or headquarters in Scotland), down more than 4,000 since 2020.

Sole traders and small-to-medium enterprises (0-249 employees) make up the lion's share of Scotland's business base, with just 1% of Scottish firms considered to be large (250+ employees).

Despite this, large firms make up half of Scottish employment and 60% of business turnover.

Interestingly, the share of Scottish business turnover generated by large firms in Scotland increased in 2022 despite the overall levels of turnover falling compared to 2021.

Unsurprisingly, the reason behind this is that Scottish SMEs have taken a bigger hit to their turnovers than large firms.

Over the past year, SME turnover in Scotland has declined by 9% while the overall turnover of large firms has fallen by 7.5%.

It is important to note that these latest estimates relate to a snapshot of the business base as of March 2022, and a lot has happened since then, including two new prime ministers and three new chancellors of the exchequer.

The economy is now in a recession after a year of high inflation.

Read the full article HERE
Read the full article HERE