The volume of business seen by Scottish firms increased during the second quarter of 2021, a new survey has found.
The Addleshaw Goddard Scottish Business Monitor report – published alongside the Fraser of Allander Institute – found that every sector surveyed reported an increase in their business between April and June, when compared with the same question being asked in the fourth quarter of last year.
The construction sector saw the highest increase, according to the survey, with a net balance of 55% of firms reporting a jump in business.
The number of companies – 500 of which responded to the study – saying their chances of survival in the next six months were “somewhat or very high” also sat at 91.8% during the second quarter, rising from 82.6% at the end of 2020.
Fraser of Allander Institute director Mairi Spowage said: “We are encouraged to see the increase in levels of activity across the board, particularly within the hospitality and accommodation sectors which have arguably been the hardest hit throughout the pandemic.
“While restrictions have now eased, it is evident that firms are still cautious about the months ahead, with the outlook on growth in the Scottish economy less positive than in quarter one. Given the turbulent 18 months we have experienced, it is unsurprising that firms are apprehensive.
“Businesses are aware that, with complications beyond the pandemic including the UK’s withdrawal from the EU, there will still be hurdles to overcome. That said, the latest results underline the positive direction in which we’re moving towards a strong economic recovery.”
Despite the boosts seen to the firms surveyed, 42% said their debt increased over the pandemic, of which 43% said it had increased by a “large amount”.
Addi Spiers, a restructuring and finance partner at Addleshaw Goddard, said: “We’re now seeing more firms embrace some sort of normality. The latest results from our business monitor show that this, alongside the move to Level 0, has brought further positivity in the volume of activity for Scottish companies.
“Recruitment and retention of staff remains a top priority for all sectors and movement in the market will continue well into the new year as firms pivot to new, more flexible ways of working – particularly as most adopt long-term hybrid working models.
“I am unsurprised at the spike in the number of firms taking on more debt, as many needed external financial security through the challenges the pandemic brought.
“However, now that the economic landscape is more settled, I suspect firms will continue to focus on trading improvements and strengthening their balance sheets.”