SCOTLAND’S governments must make it clear how businesses will be supported as a recession looms, the Scottish Chambers of Commerce has said.
Latest findings from the SCC’s leading business survey highlighted the plight of organisations as they battle increased costs, inflationary pressure and “misjudged” policies by the UK Government.
The quarterly economic indicator survey, conducted in August and September, surveyed 280 firms. It found 92% of firms were concerned about inflation – a record high, according to analysts.
The main cost concern for businesses is energy bills, with 80% of firms citing the issue as a top concern, followed by 72% naming labour costs, and 63% highlighting fuel costs.
The survey found a record number of respondents indicated the price of goods could increase in the next quarter, with some eight in 10 firms saying they intended to charge consumers more, compared to 50% from the same period in 2021.
And all firms reported a fall in confidence compared to the previous quarter and a more significant decline compared to the previous year.
Stephen Leckie, SCC president, said: “Frozen investment, faltering confidence, falling cashflow and profits, and a pessimistic global outlook, paint a concerning picture for businesses in Scotland.
“There is more pressure to come in the winter months. The signs of economic bounceback don’t look promising as more and more firms are telling us that they have been forced to cancel contracts, projects or plans to expand, due to soaring costs and difficulty in hiring people.
“Whilst we recognise the strain that has been placed on public finances, governments in Edinburgh and London must make clear how businesses will be supported to survive through the difficult months ahead and what measures will be put in place to support long-term growth.”
UK Chancellor Jeremy Hunt has been urged to engage with businesses to provide clarity on the proposed targeted support for energy bills beyond April amid fears the policy could be rolled back.
Experts claimed the soon-to-be-reversed mini-Budget had put “upward pressure on the cost of government borrowing” and urged the UK Government to set out a long-term economic prospectus to provide stability for investment amid rising inflation.
And the Scottish Government, which is due to set out an emergency Budget, will ease cost burdens on firms, with the organisation recommending a cut to non-domestic rates.
