Confidence among small business owners continues to rise, with Scottish firms now more bullish about their prospects than their neighbours south of the border.
Research from the Federation of Small Businesses, published today, found that the average smaller company is increasingly optimistic with working capacity falling and hiring intentions on the up.
The organisation said its Voice of Small Business Index showed a “substantial improvement” as it rose eight points to +44 for the second quarter. This time last year, the measure stood at just +9.
Scottish policy convener Andy Willox said it was “nice” to see Scottish firms in more buoyant mood than their counterparts in the rest of the UK, but said a rise in confidence across the UK was more significant and hailed the boost to recruitment intentions.
But he warned that the finance market would have to match business appetites if the full benefit were to be realised.
“This is good news for unemployed Scots and for the recovery, as is the fact that one-in-five businesses plan to increase capital investment this year,” Mr Willox said.
“More businesses placing orders with suppliers means more full order books, more materials to be sourced and more staff to be hired. That is the key to rebuilding our economy.
“No matter how confident we are, though, none of this investment will happen without finance. Although the position has improved since this time last year, it has hardly moved in the last three months.
“We’ll need to keep a close eye on this trend and ensure things don’t start to slip back. Having worked so hard to build a recovery, we can’t have it stifled by a lending market which lacks our members’ ambition.”
The FSB acknowledged that credit conditions have improved over the last year, but small companies’ experiences remain patchy. Only 13% of those surveyed rated the availability of finance as ‘good’, with 23% rating it as ‘affordable’.
Half of all businesses surveyed expect conditions to improve over the next three months.
Almost four-in-10 respondents expect revenues to rise over the coming quarter.