Scottish business calls on government to boost market confidence
Businesses are in a period of stasis with global and domestic factors all contributing to subdued levels of confidence and investment, according to the latest Scottish Chambers of Commerce (SCC) Quarterly Economic Indicator (QEI) survey for Q4 of 2019.
The quarterly survey was carried out between November to December 2019, during the UK general election period which suggests political considerations will certainly have had some influence in how businesses responded to the survey.
The survey revealed:
- On business confidence: Despite signs of resilience, confidence levels remain weak relative to their long-term norms, with manufacturing, retail and tourism in negative territory for outlook.
- On business investment: Investment levels remain weak and subdued across all sectors in the survey. This has been an ongoing trend as global and domestic uncertainty continues to take its toll on business communities. This is likely to impact on the growth and competitiveness of Scotland’s economy in the coming quarters.
- On cost pressures: The price of raw materials and the cost of finance is increasing compared to previous quarters, adding to the cost burden across all sectors.
- On business concerns: Business rates feature as the most significant concern for all sectors, aside from manufacturing which cited exchanges rates as its main concerns.
The survey, conducted by Scottish Chambers of Commerce, in partnership with the Fraser of Allander Institute, is Scotland’s longest-running economic survey of its kind.
Tim Allan, chairman of the Scottish Business Advisory Group and president of the Scottish Chambers of Commerce, said: “Given recent prolonged uncertainty and trading conditions, these flat results are not surprising. The business challenges prevalent in 2019 are showing signs of continuing into 2020 with business confidence at worryingly low levels.
“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 ‘election-style”’ policy making, has the potential to disrupt business planning, supply chains, as well as negatively impacting on job creation.
“We urge the UK government to clearly communicate these changes in a timely way and provide substantial support to help firms adapt – ensuring it reaches all parts of the UK. Otherwise companies will struggle to make the most of new opportunities as Britain sets its own trading polices.
“Business sustainability, economic certainty and a healthy planet are the watchwords for 2020. The role of business to leverage private sector innovation and solutions to meet the big economic and societal challenges should not be underestimated by either Holyrood or Westminster. Our message to government is clear: only by working with business will we be able to create the fair and thriving economy that will provide jobs, stability and valued public services.”