Earlier this year, KPMG unveiled its first-ever Private Enterprise Barometer, an annual survey capturing the perspectives of 1,500 privately owned businesses, including 128 in Scotland, from across various industries.

Following a challenging six months of economic headwinds, KPMG has revisited businesses to understand how developments in the first half of 2025 may have influenced their outlook. Earlier this year, nine in 10 (90%) private businesses in Scotland expressed confidence in their growth prospects for 2025. By the mid-year mark, this sentiment has grown, with confidence levels rising to 94%, reflecting an enhanced outlook regarding their growth ambitions.

Technology continued to dominate as a leading investment priority for Scottish businesses, with almost two-thirds (64%) identifying areas such as artificial intelligence (AI), cyber security and broader digital transformation as key focuses. This significantly outpaces other priorities, such as workforce and skills development (38%) and innovation (35%). 

Diversification is also high on the agenda for private businesses across Scotland. A growing number of firms (71%) are looking to enter new markets, meanwhile seven in 10 (70%) want to introduce new service lines and expand their client offering, Both of these figures show an increase (from 70% and 66%, respectively) compared to the start of 2025.

When it comes to external challenges, inflation remains the most pressing concern, cited by almost half (45%) of respondents. This is followed by potential tax rises in the Autumn Budget, which a third (34%) of business leaders flagged as a key risk.

The appetite for alternative funding options is also gaining momentum, with almost half (47%) of the nation’s businesses now open to private equity investment. This growing interest reflects a broader willingness among firms to explore new sources of capital in support of innovation, growth and long-term resilience.

Vishal Chopra, Scotland office senior partner at KPMG UK, said: “These latest findings reflect the growing optimism across Scotland’s private business community, even amid a complex economic backdrop. The uplift in growth confidence, now at 94%, speaks volumes about the determination and adaptability of these firms. 

“What stands out is the continued prioritisation of technology and diversification, with businesses clearly focused on long-term transformation, market expansion and resilience. It’s a signal that Scotland’s business leaders aren’t just navigating change, they’re actively embracing it.” 

Nationally, the mid-year check-in saw a rise in confidence, with 93% of respondents confident in their growth prospects for the months ahead. Earlier this year, 92% were confident of their firm’s growth prospects in the next 12 months.

Business priorities remained the same, with tech, skills and innovation still dominant. However, there was a slight dip in interest when it came to the areas of ESG and sustainability.

Looking ahead, private businesses highlighted a range of areas they see as key to helping build this planned growth in the upcoming Autumn Budget. These included the faster adoption of new technology and subsequent investment in research and development, fresh measures to help with business profitability, support to help nurture skills and talent, and the continued focus on a renewed industrial strategy.

Euan West, head of KPMG Private Enterprise in the UK and EMA, said: “2025 has been filled with many challenges at home and abroad for firms of all shapes and sizes.

“Private businesses have continued to show resilience and adaptability in the face of these challenges, which is reflected in their steady levels of confidence about the future.

“The results of this survey show that the UK is seen as a stable environment for business, providing a strong launch pad for future growth, but there are still challenges, particularly when it comes to ongoing inflation conditions.

“All eyes will now fall on the Autumn Budget to see if the concerns of private businesses are addressed.”