Confidence and wellbeing impacted in latest South of Scotland business survey
The latest South of Scotland Business Panel Survey has revealed the challenging circumstances local companies and social enterprises are currently facing.
The survey, carried out in October and November 2022 with 610 businesses, found optimism and confidence had been impacted by the cost of doing business, inflation and recession.
The challenging conditions has also significantly impacted the wellbeing of employers and staff.
However, business performance has remained stable, and in some cases had performed fairly well, with financial viability remaining generally positive.
Key findings from the survey included:
Wellbeing and support
- A majority of businesses (78%) reported impacts of the cost crisis on their own wellbeing.
- Around half (51%) reported generally feeling worried or stressed due to the cost crisis
- Around half (52%) of employers reported impacts of the cost crisis on their staff.
- Three quarters (74%) of employers were taking or planning to take actions for their staff in response to the cost crisis. The most common action was engaging with staff to understand their needs (62%), following by increasing wages (47%) and encouraging flexible working (46%).
Optimism and performance
- Confidence in the economy had fallen to 37%, compared to 60% in the survey at the same point last year
- Performance was in line with previous surveys, with sales and turnover mixed and employment and exports largely stable
- Around a quarter of businesses felt able to plan for no more than a month ahead
Cost Crisis
- Almost all businesses (99%) had experienced cost increases in the past 12 months, with 84% experiencing substantial increases.
- The biggest areas of cost increase were raw materials (87% saw an increase) and electricity and gas (79% and 49%).
Financial viability
- The majority (83%) of businesses were confident they would be viable over the next six months, down from previous survey in June/July 2022, when 91% were confident.
- Tourism businesses were less confident than average, with around a quarter (27%) saying they were not confident in their viability.
Financial concerns and access to finance
- The majority of businesses (86%) had financial concerns, the top concerns being unpredictable costs (77%)
- Just under half (48%) of businesses were currently using or planning to use some of form of finance, such as credit, overdrafts or loans. This is a decrease since October/November 2021 (when 59% were doing so).
Ownership and recruitment
- 88% businesses described themselves as family-owned, while 5% described themselves as employee-owned (with employees owning a majority of the shares).
- Over one-in-ten (13%) businesses described themselves as women-led.
- One in five (21%) businesses had recruited staff in the last six months.
- Of those that had recruited, 18% had recruited from further afield in the UK and 4% from international markets.
What is the business survey?
The South of Scotland survey is part of a wider rural Scotland study in partnership with the Scottish Government and Highlands and Islands Enterprise which currently takes place three times every 12 months.
The South of Scotland Business Panel survey was carried out as part of the Rural Scotland Business Panel, a survey of 2,719 businesses across rural Scotland, commissioned by a partnership of SOSE, Highlands and Islands Enterprise (HIE) and the Scottish Government.
Findings from the HIE Business Panel and the overall Rural Scotland Business Panel are reported separately.
Jane Morrison-Ross, Chief Executive of SOSE
“The latest South of Scotland Business Panel Survey confirms the difficulties our region’s companies and social enterprises are having to deal with in response to the cost of doing business, inflation and recession.
“It is concerning to see confidence, wellbeing and cost increases impacting our businesses, and in the short-term all public sector partners must work together to support them as best we can.
“The survey also covers other areas which SOSE will look to support where it can in 2023, such as women in business.
“However, the survey does highlight some areas for optimism.
“Three-quarters of businesses were looking to support their staff’s wellbeing through the cost crisis, performance remained stable and financial viability over the next six months being generally positive.
“I would continue to encourage any business or social enterprise currently facing rising costs to visit findbusinesssupport.gov.scot/cost-of-doing-business for the latest advice, information and support, or to come speak to us.”
Zoe Meldrum, SOSE’s Economic Research Insights - Lead Analyst
“We must thank the 610 businesses who took part in the latest South of Scotland Business Panel Survey.
“With each business panel survey, we are growing our understanding of the experiences and views of businesses and social enterprises in the South, and how best to support them.
For the first time, the survey explored aspects of wellbeing for our business leaders and their staff in our survey.
“These results now help us to understand impacts of the cost crisis beyond the bottom line, and it is heartening to see the different ways businesses are supporting their staff in these challenging times.
“The business panel survey provides an invaluable opportunity to understand the views of our business base here in the South, and we are always looking to increase membership of the Panel.
“Anyone interested in joining should visit www.southofscotlandenterprise.com/business-surveys.”