Scottish Business Monitor, 2024 Q1

This report summarises the key results from our latest Fraser of Allander Institute (FAI) Scottish Business Monitor, published in partnership with Addleshaw Goddard.

The survey sampled almost 400 firms in February from across the Scottish economy, examining business performance in the current quarter and the outlook for the year ahead.

Early 2024 was a difficult period for business in Scotland. All of our main indicators showed deterioration, with the exception being capital investment – which improved – although remains in negative territory.

Businesses are much more positive as they look ahead, and indeed more positive than they were last quarter.

Our latest results also show that:

- The vast majority of businesses expect economic/ business uncertainty (97%), staff availability (92%), and political uncertainty (90%) to be important or very important over the next three months. These are up considerably for businesses compared to last quarter.

- In every category, the proportion of businesses reporting that costs were higher has increased compared to last quarter. The increase in the cost of employing people were the most commonly cited, with 77% reporting that total employee costs were higher and 76% reporting that wage costs were higher.

- In this edition, we explored with businesses what they felt should be the top priority for the UK Government after the election. “Deliver long-term economic growth” was by far the most popular option, being selected by 72% of businesses. This was followed by “Tackle Labour and Skills Shortages” at 45% and “Reduce UK business taxes” at 43%.