Podcast: Cost Of Doing Business Crisis - From Fraser Of Allender Institute
4th February 2023
Ben Cooper is joined by Adam McGeoch to discuss the latest Scottish Business Monitor results for Q4 of 2022 and the ongoing cost of doing business crisis.
This podcast is 14:33 minutes long.
Listen to it HERE
Read the full Scottish Business Monitor publication here
THIS REPORT SUMMARISES THE KEY RESULTS FROM THE LATEST FRASER OF ALLANDER INSTITUTE (FAI) SCOTTISH BUSINESS MONITOR, PUBLISHED IN PARTNERSHIP WITH ADDLESHAW GODDARD.
The survey sampled 400 firms in December from across the Scottish economy.
The survey examined business sentiment in the final quarter of 2022 and the outlook and expectations for the year ahead.
The net balance of all of our core business activity indicators for Q4 2022 are negative for the first time since Q1 2021.
However, after slipping into the red last quarter, business sentiment bounced back ever so slightly and has returned to positive territory.
OUR SURVEY RESULTS ALSO SHOW THAT:
• 9 in 10 Scottish firms have seen their costs increase over the past year, with over 1/4 of manufacturing and 40% of hospitality and construction firms experiencing their costs increase by more than 50%.
• Just under half of the businesses surveyed this quarter expect to reduce their operations this year due to higher energy bills, and the share of firms expecting to reduce operations by a large extent is up from 4% last quarter to 7% this quarter.
• However, more than 60% of firms reported that the current energy
crisis has encouraged them to make energy-efficient improvements to their business. But, 60% of businesses say that price point is a barrier to making these energy-efficient improvements to their businesses.
• The labour market continues to cool slightly, with the number of firms with vacancies down again on last quarter. However, filling these vacancies remains a challenge, with 80% of firms reporting
applicants to lack the skills required for the job.
Common concerns among responding businesses were the costs of energy (88%) and the price of inputs (87%). However, looking toward the next 6 months, the majority (75%) of businesses expect
total employee costs to be the key cost driver in the economy.
• Overall sentiment for the Scottish economy continues to worsen, with around 3 in 4 firms expecting growth in the Scottish economy to be weak or very weak over the coming year.
• Just 5% of firms felt more confident about the outlook for their business following the Scottish Budget, and just 12% felt more confident after the UK Government's Autumn Statement.
