Confidence levels in the Scottish economy remain low among businesses in the Highlands and Islands, according to a new report.
But, but despite the gloom, development agency Highlands and Islands Enterprise (HIE), which carried out the research, says the “vast majority” of companies questioned predict “growth or stability” for their own business in the next two years.
The result of HIE’s latest business panel survey, carried out in January and February, show overall confidence in Scotland’s economy at a net negative of -24 points.
The level is similar to findings of the regular quarterly research published in July and October last year, but a stark contrast to the net positive of +7 points recorded in 2014.
Almost two-fifths of the 1,002 firms questioned reported a decline in their confidence in Scotland’s economic outlook over the last six months.
But 79% of respondents recorded “good or steady performance” in their own business since the middle of 2106 and 87% anticipated growing or remaining stable in the next two years.
Tourism businesses were more likely than average to be very optimistic for future business prospects over the next 12 months. Those with more than 25 staff were more likely to anticipate an increase in employment.
And 30% of companies that export from the region reported an increase in international sales in the past six months.
Companies currently trading with the rest of the EU and businesses in the food and drink sector were more likely than others to anticipate a negative impact of changes in trading conditions following the UK’s departure from the EU. Businesses were most concerned about new tariffs increasing the cost of importing goods.
Those who source products from the EU had either already seen, or were anticipating, an increase in the cost of imports due to the low value of the pound. Exporters and tourism businesses felt that the weak pound had helped them become more competitive.
Carroll Buxton, HIE’s director of regional development, said: “The feedback that businesses across the region have been performing well and are optimistic about the future is good news.
“Clearly there are uncertainties and concerns over what lies ahead, but the evidence suggests continuing resilience in the business community. This will be linked to the diversity of small to medium sized companies and the strength of our growth sectors, such as tourism, food and drink and life sciences.”
