Business confidence is mostly strong: survey

Confidence in the UK business sector is generally strong, according to an exclusive survey conducted by scotsman.com.

Some 52 per cent of businesses that participated in the online survey were either “very” or “quite” optimistic about the Scottish and overall UK economy in the next 12 months. A discouraging 28 per cent of respondents, however, were either “not very” or “not at all” optimistic about the Scottish economy.

Almost 57 per cent of businesses surveyed expected total orders to increase over the next year, with an increase of 45 per cent expected for Scottish orders. Turnover, sales and profits were all expected to improve among a majority of respondents, with 59 per cent saying turnover will rise in the next 12 months. Exports were the lowest projected business performance, at 21 per cent, however 40 per cent of respondents ticked “not applicable”, indicating their businesses do not work with markets beyond the UK.

The results were welcome news for Scotland’s main economic development agency.

"Scottish Enterprise is encouraged by the general optimism which exists in
the business community towards the future growth of the economy,” said Jim McFarlane, chief executive of Scottish Enterprise Edinburgh and Lothian.

Scotsman.com conducted the survey to measure economic climate and understand the opinions of key decision-makers in Scotland and the UK. Results were collected for the period 1-7 April. A total of 195 people from the UK responded to the online survey; of these, 162 respondents were from Scotland.

Among other results, healthy employment levels were forecast for the year ahead, as 46 per cent of respondents expected employment levels to increase in their organisation; this was compared to only 8 per cent of businesses who expected a decrease in staff levels. The biggest challenges facing business were cited as ”insufficient funds for recruitment” (33 per cent) and a “lack of skilled staff in the marketplace” (30 per cent).

"The big issue for Scotland's business base continues to be around the ability to employ and retain skilled staff and while Scotland enjoys a world wide reputation for its highly skilled workforce, there must continue to be a collective responsibility towards ensuring our employers have access to the right people with the right skills to help the economy grow," McFarlane said.

Keeping staff up-to-speed and stimulated is key to any business. Of those surveyed, nearly 50 per cent listed “more motivated staff” to be a direct benefit of training. Over half had a separate strategy for training and development, with managing directors, at 43 per cent, being primarily responsible for the implementation of skill enhancement. On-the-job training, at 68 per cent, was the most popular method of teaching staff, while 49 per cent held short courses and nearly 34 per cent utilised e-learning. Impressively, 41 per cent of the respondents set out agreed training plans for their employees.

Derrick Ross, business partnership manager for skills & training group learndirect scotland, said: “Small businesses are increasingly recognising the need to develop training plans. Over the last year, 67 per cent of small-to-medium size enterprises (SMEs) that we have engaged with have gone on to develop a structured training plan for their companies.”

No matter how big or small the business, technology is vital in today’s marketplace. Seventy-three per cent commented that their IT budget had increased or remained the same than the previous 12 months, with 62 per cent stating that this field was “very important” to the overall success of their company. As well, half of the group surveyed said they plan to invest in their “web presence” in the next 12 months.

Microsoft was cited as the preferred network supplier, and nearly 50 per cent were considering the large American company as a supplier of mobility services. IT security was a concern for many, with 52 per cent planning to invest in this safeguard over the coming year.

Raymond O'Hare, Microsoft’s regional director for Scotland, said: “Technology has levelled the playing field for SMEs by allowing them to work as efficiently and professionally as larger competitors. The adoption of technology is critical if they are to remain competitive in the Scottish market.”

Meanwhile, 55 per cent said they were aware that government assistance was available to their companies as a small- and medium-sized business. However, while 40 per cent were either “very” or “quite” likely to investigate the possibility of government assistance in the next year, another 46 per cent said they were either “not very” or “not at all” likely.

Of the UK businesses who answered the survey, 57 per cent of them were very small businesses indeed, employing less than ten staff. Of this figure, just over 9 per cent surveyed were self-employed. Nearly 50 per cent of those who answered the survey were either owner or partner in the business, with almost 10 per cent in the role of managing directors or general managers.

Most companies had head offices based in Lothian or Strathclyde. Industry descriptions ranged from financial services and media & publishing to business services, companies in the voluntary/public sector and transport/logistics.

The survey was unscientific and the accuracy of the responses cannot be guaranteed.