Scottish firms 'less confident' despite sales growth
- 28 August 2014
- From the section Scotland business
Business confidence has fallen in Scotland despite firms reporting strong sales growth over the past year, a survey has found.
Accountancy body ICAEW said confidence dropped below the UK average between April and July, to reach its lowest level since early 2013.
However, Scottish businesses continued to report strong sales, with exports outpacing the UK as a whole.
ICAEW said the long-term outlook for firms remained positive.
In the latest ICAEW/Grant Thornton Business Confidence Monitor, Scottish companies recorded a confidence score of +15.1, well below the UK average score of +32.2.
They also reported an average rise of 4.5% in sales volumes over the last 12 months, with Scottish exports increasing by 4.9%.
Looking ahead, respondents said they expected to see a 3.8% rise in sales over the next year.
The survey also suggested businesses in Scotland were becoming increasingly willing to make longer-term investments.
Capital investment grew by an average of 3.9% over the past 12 months, substantially above the figure of 1.6% recorded a year ago.
However, firms said they faced problems in hiring skilled employees.
The proportion of businesses reporting that skills availability was more of a challenge now than a year ago rose to 18% during the last quarter, up from 7% a year ago.
'Some way to go'
ICAEW Scotland president Paul Adderley said: "Despite positivity in areas such as growth, factors such as the recently reported increase in the number of insolvencies show that, whilst there are positive signs, there is still some way to go before we fully return to where we were pre-crisis."
Grant Thornton's managing partner in Scotland, Kevin Engel, added: "While the latest findings are slightly concerning, they are not entirely surprising.
"Earlier this year, business confidence in Scotland rose to record levels, buoyed by a resurgence in economic activity.
"Recovery takes time and presents its own challenges - from accessing capital for growth to finding and adequately rewarding a skilled workforce."