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Insider UK
Insider UK
Science
Peter A Walker

SMEs revenues in Scotland continue to bounce back

More than three fifths (68%) of small and medium-sized businesses (SMEs) in Scotland are expecting to see revenues rise this quarter, compared to the same period last year.

The latest quarterly Barclays SME Barometer - conducted among a nationally-representative regional and industry sample of 574 business leaders, including 56 in Scotland - showed that Scottish SMEs expect to see a 10.4% rise between the months of April and June 2022, against the same period in 2021.

This follows a successful first quarter of the year, with 51% reporting a rise from the previous quarter, and 56% reporting a year-on-year rise in revenue.

These figures are supported by data from Barclaycard Payments, which showed a rise of 28.6% in the value and 29.1% in the volume of payments to SMEs in Scotland in the same period, versus pre-pandemic.

However, more than three quarters of Scottish SMEs (79%) reported that rising living costs, energy bills and inflation are a long-term concern for their business.

More than half (56%) worry that the rising costs will negatively impact consumer spending and almost a third (30%) fear it will make them less competitive, as they are forced to increase their own prices. A further 36% said they may need to re-evaluate their operations to reduce the amount of energy they use.

While they remain confident about the future of their businesses, half of Scottish SMEs have a pessimistic outlook on the prospects for the wider UK economy, compared to 46% of businesses UK wide. Almost half (48%) said that the current business environment is unstable, compared to 41% UK-wide.

Colin O’Flaherty, head of SME at Barclaycard Payments, said: “It’s not surprising that in the immediate term, cost of living increases, rising inflation and difficulty hiring new workers are a major cause of concern for small business owners.”

Additional findings reveal that despite the challenging environment, the majority (91%) of SMEs in Scotland are planning to invest in their businesses over the next 12 months.

Almost two fifths (39%) plan to recruit new staff, while 34% plan to invest in new equipment and technology and 26% plan to invest in re-skilling or up-skilling staff.

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