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Business News

Scottish business performance picks up but concerns remain

By CreditMan Friday, April 13, 2012

Businesses in Scotland have seen a slight improvement in performance in the first quarter of 2012 compared to the same period last year, according to figures published by the Scottish Chambers of Commerce (SCC).

The SCC, which represents thousands of businesses across all sectors of the Scottish economy, said that although business confidence was on the up, 'widespread difficulties' still remain for businesses.

According to the quarterly figures, trends in orders and sales in most sectors were stronger, particularly in manufacturing and tourism, leading to what the SCC called a 'modest but uncertain' recovery.

Manufacturing turnover is expected to improve for almost half of firms, with balance profitability expected to rise for the first time since the end of 2010. Business confidence in the tourism sector also improved, with expectations for the year ahead said to be at their highest level in four years, although two thirds of businesses stated that lack of tourist demand, poor transport infrastructure, high fuel costs and poor marketing remained a concern to hotels.

The survey also revealed that pay increases in the first quarter of 2012 ranged from 2.5 per cent in construction and retail to 3.8 per cent in tourism - all well below the rate of inflation and insufficient to aid tightened household spending.

Retail performance however, remained 'very low', blamed on weak consumer confidence and spending, and reflected in the closure of many high street shops.

Garry Clark, Head of Policy and Public Affairs at Scottish Chambers of Commerce, said: "Businesses are now more confident as to the year ahead, but confidence varies between sectors and Scottish regions.

"The recovery remains tentative and uncertain and governments at both the UK and Scottish level need to act to support and encourage the recovery, and to recognise that a 'one size fits all' approach is not always appropriate and that specific measures may be required to ensure our rural and island businesses can grow and remain competitive."

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