Business sentiment in Scotland is improving as Covid-19 restrictions start to ease and the wider economy re-opens, according to the results of a survey published today.
Compared to the last quarter of 2020, firms are more optimistic about their volumes of trade over the next six months, with employment also expected to increase, the latest Addleshaw Goddard Business Monitor found.
More than 500 Scottish companies were questioned in the survey, which was carried out in partnership with Strathclyde University’s Fraser of Allander Institute.
It found that almost 90% of firms were confident that their chances of survival over the next six months is “somewhat or very likely.” The outlook for economic growth has also improved, with 25% expecting a positive 12 months.
But, nearly two-thirds of companies that trade with Europe reported that Brexit had created a negative impact on their trading, with only 3% reporting and increase in activity since the end of the UK’s transition period.
The accommodation and hospitality industries continue to have the lowest sentiment of all sectors, according to the research.
It also found that, while many businesses have experienced problems in managing staff working from home, 27% plan to permanently reduce their office footprint.
Fraser of Allander Institute director, Mairi Spowage, said: “As the country starts to emerge from a sustained period of lockdown, it is evident that this is a catalyst for the increased levels of optimism across all sectors. The hospitality and accommodation sectors have been two of the hardest hit throughout the pandemic, but we must take hope in that sentiment and expected level of business within these groups have improved over the next six months.
“Despite the increase in positive sentiment we shouldn’t be disillusioned to think the economy will return to pre-pandemic levels quickly. We are still contending with the fallout of Brexit which has created negative trading conditions for firms across the board.
“These challenges are likely to have a long-term impact. However generally, we can remain confident that this will not hinder progress towards a strong economic recovery.”
Alison Newton, partner and co-head of Real Estate at Addleshaw Goddard, added: “The last 12 months have been hard for many sectors across the country, without doubt, but it’s clear that more and more businesses are regaining confidence in regard to expected activity and employment levels.
“What’s difficult to see is that many businesses across Scotland are having to downgrade their workspace requirement whilst essentially acknowledging that it will have a negative impact on performance.
“Of course, some will have had a depressed or uncertain income over a year now, so who can blame them; they’re simply doing what they need to do to survive.”
“I think over the coming months we’re going to see a surge in more compact but higher quality workspaces, with both landlords and occupiers thinking hard about how they can not only drive productivity, but create places that promote health, wellbeing and sustainability.”
Following on from this survey specifically looking at the workspace challenge for Scottish businesses, Addleshaw Goddard will release a summary report on workplaces next week assessing challenges and opportunities for Scottish businesses.