Scottish businesses are struggling to grow amidst the deadlock around Brexit, rising costs and a global economic slowdown that are discouraging investment and expansion, according to a new report.
The latest Scottish Chambers of Commerce (SCC) quarterly economic indicator survey for the second quarter of the year shows businesses are continuing to face difficulties, partly due to prolonged uncertainty around the UK’s position in the European Union.
It also found that every sector in the survey, except retail, increased wages over the quarter, showing that firms are having to pay more to retain the talent as the supply of skilled workers eases.
And the majority of sectors reported rising costs pressures from raw material prices and overheads related to Brexit preparations. Some 64% of manufacturing firms and 52% of construction firms listed rising raw material prices as their top cost pressure.
According to the report, manufacturing has faced the biggest impact from Brexit uncertainty as stockpiling in the first quarter means capacity utilisation was at its lowest level in ten years.
But the survey found that Scottish companies are ‘getting on with the day job’ and demonstrating resilience in the face of persistent challenges. Overall business confidence has made a slight recovery on the first quarter when the UK faced a cliff-edge Brexit, but is generally lower than the same period last year.
Tim Allan, chairman of the Scottish business advisory group and president of Scottish Chambers of Commerce, said: “Businesses are weighing the costs of the chaos caused by more dithering over Brexit and the burden is severe. Our members are crying out for the return of some sanity as they undertake the important role of creating jobs and paying taxes.
“Whoever the next prime minister will be, they must take brisk action to unlock investment and instil confidence back into the UK economy.
“Scottish businesses need to see steps being taken to avoid a disorderly Brexit and a responsible consensus reached as soon as possible on the Brexit process with the European Union.”
