Business Sentiment Shows A Glimmer Of Optimism As Government Budgets Are Squeezed

29th January 2023

Latest update from the Fraser of Allender Institute.

This week, there were a number of business surveys out trying to capture the sentiment of the business base as 2023 kicks off.

Our favourite one is, of course, our very own Scottish Business Monitor, which we produce every quarter in partnership with Addleshaw Goddard. Excitingly (well, for us at least!) this is the 100th edition of the Business Monitor, which has been running for 25 years.

Thank you so much to every business that has responded to our business survey over the years: without your support, we wouldn't be able to have this valuable insight into the current activity, sentiment and outlook of businesses in Scotland. It also allows us to feedback on the latest views from businesses to policymakers.

So, what did the latest results tell us?

In the survey, we ask businesses to reflect on how the last three months went, and what their expectations are about the next six months.

In the face of what feels like unrelenting economic gloom, the good news is that despite a negative view of the last quarter of 2022, business sentiment for overall activity and turnover creeps into positive territory for the first half of 2023.

It is fair to say that our results vary considerably by the business size. For the very smallest businesses, so those under 10 people, sentiment is still negative: perhaps reflecting the additional worries smaller businesses have about coping with the reduced Government support for energy bills.

Despite this good news though, the outlook for capital investment and export activity remains very negative. Given the importance of investment and openness to drive productivity in the economy, this is a concern for the medium-term productive capacity of the economy.

Read the full report HERE