Whilst historically, the spring months each year usually offer a seasonal boost to small business growth forecasts, in Scotland the like-for-like figures for April show that small business growth outlook is at its lowest level since the country went into the first Covid lockdown in 2020.

Percentage of small businesses in Scotland predicting growth each April 

The findings are from the Business Barometer study by Novuna Business Finance, which has tracked small business growth outlook every quarter since 2015. The new figures also highlight the challenging context in which many Scottish enterprises are currently operating, with 72% of small businesses fearing disruption to their enterprises that would result from current geo-political and economic uncertainty. Of those that expressed concerns:

• 54% of Scottish small businesses feared the impact the Middle East war would have on their business and supply chain. This rose sharply to 70% for small businesses in the transport and distribution sector, 68% for those in the agriculture sector and 61% of manufacturing small businesses.
• 20% of respondents in Scotland said they still feared the potential impact of US tariffs on the UK.
• 17% of Scottish small businesses also said that the war in Ukraine and instability in the broader region would impact their business and supply chain.
• As a result of all this uncertainty on the UK economy, 74% of Scottish small businesses said they feared the prospect of the UK Government raising UK taxation later in the year.

These findings follow Novuna Business Finance research in March on rising energy prices, after the outbreak of war in the Middle East region, which revealed that small businesses estimated their transport costs would increase by an average of £753.56 a month, and the cost of running machinery estimated to rise by an average of £785.92.

Sabrina Ahmed, customer engagement manager at Novuna Business Finance, said: “After 10 years of tracking small business outlook across Scotland, it is clear how serious current worries have become around energy prices, the fear of future tax rises and general macro-economic uncertainty.

“We have learned so far this year that many small businesses are working hard to reduce fixed costs, free up working capital and are taking steps to diversify their business. Novuna Business Finance is committed to helping established Scottish enterprises with funding that will help them to navigate market uncertainty and  power future growth.”