Scottish business proves optimistic following modest start to 2017


Scottish business proves optimistic following modest start to 2017

A third of Scottish businesses report a rise in volume of business during first quarter of 2017, according to the Royal Bank of Scotland Business Monitor.

Our news

31 March 2017

Findings from the latest Scottish Business Monitor show that the North East has prepared for an upturn in two years, and suggest that the prolonged hangover in the region since 2014’s oil price collapse is coming to an end.

 

The findings reveal:

  • A third of Scottish business report a rise in volume of business during first quarter of 2017;
  • Firms in North East preparing for upturn in new business – the first time in two years;
  • Export activity flat but businesses expect growth over next six months, driven in part by the fall in the value of the pound;
  • Scottish companies face strongest inflationary pressures in four years and expect these to intensify over next six months.

The Royal Bank of Scotland Business Monitor surveyed more than 400 Scottish businesses and reveals that a third (34%) of firms reported an increase in the total volume of business during the last quarter, compared to 31% who witnessed a fall in activity.

The performance of the financial and business services sector was strongest, with a net 14% reporting an increase in total business volumes. Transport and communications also enjoyed a strong performance with a net 9.5% enjoying an increase. However, a net 16% of construction firms reported a fall in business volumes.

New business continued on the upward trend first reported in the second half of 2016. One in three (33%) stated that the volume of new business rose in the three months to February; compared to one in four (24%) who stated it fell.

Collectively, a net 21% of all firms surveyed said they expected total business volumes to rise in the six months. Firms in all parts of the country expect business volumes to grow, including the North East (12%). This is the first time the North East has prepared for an upturn in two years, and suggests that the prolonged hangover in the region since 2014’s oil price collapse is coming to an end.

Exports proved flat over the course of Q1. However this compares to a balance of -16% during the final quarter of 2016 and -11% in Q3 – making this the first non-negative balance in two years. A net 11% of firms expect export activity to rise over the next six months, potentially reflecting the recent depreciation in the value of Sterling.

Inflationary pressures are continuing to impact upon costs for Scottish business, with 59% of all businesses stating that costs rose over the last quarter. Less than one in 12 (7%) reported a fall. Cost pressures were most acute in distribution, where a net 78% reporting a rise in costs, followed by tourism (75%) and transport and communication (48%).

The Business Monitor survey is undertaken for Royal Bank of Scotland by the Fraser of Allander Institute. The Business Monitor is the definitive monitor of business trends, market conditions, financial factors and business conditions in the Scottish economy. The survey was carried out during February and 424 firms responded.

 

Posted In

Our news

Related articles

Family-run brewery to expand with multi-million funding from Royal Bank of Scotland

The Royal Bank of Scotland has provided a £25 million refinancing package to brewery Joseph Holt Ltd.

Royal Bank of Scotland encourages protection against fraud on ‘Take Five Day’

People across Scotland are worried about their families falling victim to fraudsters, yet 73% admit they have never discussed the simple steps they can take to protect themselves and those around them from financial fraud.

Latest news

Royal Bank of Scotland hosts ‘Easy Wins Live’ event

The event explored today’s ‘always on’ world and the pressure Scots face as they struggle to balance life inside and outside of work.

To win the fight against fraud and scams, it is vital to educate young people.

Primary school children in Currie, Edinburgh put on their detective hats last week to learn more about fraud and scams thanks to the Royal Bank of Scotland MoneySense programme. Les Matheson, CEO of Personal Banking, tells us why it’s so important to financially educate young people.

New NatWest debit cards now accessible for all customers

New card features are being rolled out from today with all cards having a notch and raised dots.

Set Tab for lightbox