Blog: Johnston Carmichael experts reveal their top 10 business predictions for 2018
After a snap general election, the beginning of Brexit and Bank of England interest rates rising for the first time in 10 years, the economy saw its share of surprises in 2017.
So, what will 2018 hold for Scottish business? Experts from Johnston Carmichael, Scotland’s largest independent firm of chartered accountants and business advisers, have gazed into their crystal balls to make their top predictions.
Mark Stewart, head of infrastructure and renewable energy at Johnston Carmichael, said: “Now that the Scottish and UK Governments have committed to phasing out petrol and diesel cars, we are likely to see an upsurge in the construction of charging infrastructure. In Scotland, the A9 is being promulgated as the ‘electric highway’. Shell has already announced it will build 80 high-power EV charging stations across Europe and property developers are increasingly including EV charging points as a benefit for residents. Recent breakthroughs in battery technology coupled with potentially using renewable energy generation also suggest that the switch to EVs is well and truly underway.”
“I think we will see a strong increase in the number of Scottish businesses sourcing peer to peer lending, which matches borrowers directly with lenders, in 2018,” said partner Adam Hardie. “Companies such as the Lending Crowd are currently the business world’s best kept secret, but their ability to deliver speedy transactions with attractive terms are firmly establishing them as strong alternatives to the banks.”
Alex Martin, Johnston Carmichael’s head of fishing, said: “Recent quota increases for key fishing stocks including cod and haddock have been welcomed by the Scottish fishing sector which could be strengthened further as Scotland regains control over its waters post-Brexit. While there is still uncertainty over Scotland’s future share of the catch, there is a real confidence in the future of the industry which is reflected in the number of new vessels being built.”
Graham Alexander, Head of Corporate Finance at Johnston Carmichael, said: “Whilst there continues to be ongoing uncertainty in the general economy due to Brexit, we are seeing no slow-down in businesses and funders looking to invest nor from business owners looking to pass on their businesses to new investors. We would see 2018 continuing along similar lines with a hope that, once the outcome of the Brexit process becomes clearer, the increased certainty will allow for continued strong activity in the M&A market.”
Andrew Walker, joint Aberdeen office managing partner, said: “The oil and gas services market is seeing some pick up, and while patchy, with a more stable oil price and continuing M&A activity in offshore assets, we are starting to see this filter into the wider supply chain; feeding increased confidence and M&A activity both in the UK and internationally.”
“A European directive being implemented in January 2018 will ban businesses from charging customers extra for making payments using a debit or credit card in the EU. However, as banks will continue to charge businesses to process card payments it is likely that firms – especially small businesses – will put prices up to compensate,” said Lynne Walker, Johnston Carmichael’s head of business advisory.
“The Scottish government has set out its plan to transform Scotland’s public services in A Nation with Ambition, at the heart of which is a commitment to invest in modernising Scotland’s infrastructure whilst promoting low carbon energy infrastructure and the digital network. What the market needs is a detailed project pipeline leading to deal flow, creating the optimism needed to sustain the business community,” said partner Mark Stewart.
“The success achieved on exit by various tech businesses including HotDocs and Aquila Insight will hopefully have a positive knock-on effect on tech start-ups as investors look for the next big thing,” said Andrew Holloway, head of entrepreneurial taxes. “I also hope we will see the strong tech scene in Edinburgh replicated across other Scottish cities as the sector matures.”
Sandy Manson, chief executive at Johnston Carmichael, said investment in technology and innovation is helping to provide Scottish businesses with a competitive edge that could deliver success in 2018.
He added: “Scottish SMEs have demonstrated strong resilience amid Brexit uncertainty and the fragile economic outlook. This will continue next year with advances in technology and innovation enabling small businesses to achieve significant market penetration - even when competing with the multinationals.
“In our own business, we’ve seen millennials shaking up the workplace with their creative approach and sense of entrepreneurialism. I think we will see a lot more of this across Scottish industry.
“With the prospects of a recovery in oil and gas, a strong and ambitious food and drink sector and our tech industries attracting worldwide interest, the global growth prospects for Scottish business are encouraging and this can only help to drive forward our economy in 2018.”