The confidence of UK small businesses is at a three-year low and two-thirds of Scottish firms are concerned about domestic economy, according to the Federation of Small Businesses (FSB).
The downcast mood was revealed as small business owners from throughout the UK met in Glasgow yesterday for the FSB’s three-day annual conference.
The latest Small Business Index found UK small business confidence at its lowest level since 2013.
Scottish business owners are amongst the gloomiest in the UK, with a majority pessimistic for the first time since 2013.
The FSB’s small business index stands at -2.0, down from +20.4 a year ago.
The report has been published as First Minister Nicola Sturgeon, Labour shadow chancellor John McDonnell and Scottish Conservative leader Ruth Davidson line up to address more than 1,200 small business delegates.
Andy Willox, FSB Scottish policy convener, said: “Scottish firms whose prospects are indirectly or directly allied with the state of the oil and gas industry are facing gruelling trading conditions.
“The pressures on the massive services sector are also taking their toll. This could explain why Scottish confidence figures lag behind even the depressed numbers for the UK as a whole.”
Almost two-thirds of Scottish business owners cite the state of the domestic economy as a barrier to their own business growth.
The report also highlights that small business revenues and profits are down, although firms predict improvement.
Investment intentions have held steady, however, and credit conditions continue to improve.
Mr Willox continued: “We need to create the right conditions for more local, small and micro-businesses to establish, grow, employ and invest. The next Scottish Government must spend wisely, tax fairly and regulate sensibly.
FSB also found a raft of new challenges facing small businesses included the national living wage, pension auto-enrolment and plans to introduce mandatory quarterly digital tax reporting may also be contributing to the decline in business sentiment.
FSB vice-chairman Sandra Dexter said: “We need a renewed push for growth and productivity.”