Growth worries hit four-year high among Scotland’s small businesses

Some 83 per cent of companies see external factors as dragging on growth, according to the latest research from lender Novuna Business Finance.

The impact of overseas conflict on energy and fuel prices is now a serious concern for two in five enterprises in Scotland (40 per cent) - ahead of the UK average (32 per cent).

The findings from Novuna show that current geo-political uncertainty is dominating the disruption felt by Scottish small business owners this spring, proving to be far more significant than local or immediate market challenges.

The most significant barriers to growth cited included: macro-economic uncertainty (noted by 50 per cent of those polled), rising oil prices (40 per cent of firms) and, as a consequence of this, the impact on higher running costs (41 per cent). In contrast, the cost of skilled labour (cited by 28 per cent of company owners), volatile cashflow (18 per cent), fluctuating exchange rates (9 per cent), unpredictable weather (6 per cent) and crime and theft (4 per cent) emerged as more minor concerns.

The long-term business impact of Brexit was still seen as a barrier to growth by 28 per cent of Scottish businesses - a bigger issue in Scotland than the rest of the UK (20 per cent).

Jo Morris, head of insight at Novuna Business Finance, said: “Some may assume that conflict in the Gulf is a far-away issue that only affects governments and big businesses. Our findings show how quickly and how deeply Scottish small businesses have felt the impact of rising energy and fuel prices in the UK.

“Businesses that rely on heavy equipment and transport seem to have felt the impact most significantly - as have those enterprises based in extreme points of the UK, businesses that may have bigger transport and shipping costs.

“Overall, the fact that four in five enterprises cite factors that are holding back business growth is significant. Actual growth forecasts each quarter have been relatively static for some time.”