Business confidence in Scotland is at its highest level since 2014, boosted by the gradual reopening of the economy, a new survey has found.
But it still lags behind the rest of the UK, according to the research carried out for the Institute of Chartered Accountants in England and Wales (ICAEW).
The latest ICAEW Business Confidence Monitor (BCM) showed companies predicting domestic sales growth of 6.8% over the coming year and also anticipating an increase in exports.
Companies planning to take on more staff
Firms said they plan to start taking on more staff as the economy recovers. Employee numbers are expected to rise by 3% in the coming 12 months and companies anticipate that average total salaries will increase.
But the survey also found the rate of staff turnover was a worry for a just over a quarter of businesses questioned.
Other challenges included difficulties with regulation and red tape. The proportion of Scottish companies citing regulatory requirements as a growing source of difficulty stands at 45%, compared to the UK average of 40%.
According to the ICAEW report, input prices are expected to rise by 1.5% over the next 12 months, with selling prices likely to increase by 1.3% in the same period, both in line with pre-pandemic rates.
David Bond, ICAEW regional director for Scotland, said: “These are positive findings for the Scottish economy, particularly the expected growth of domestic sales and exports.
“But our businesses tell us they continue to face challenges with recruitment and from complicated regulatory requirements.
It is vital that, given Scotland’s economic recovery and concerns that the global health situation could deteriorate in the autumn, businesses are not hit with additional costs as support schemes, such as furlough, are wound down.”
Nationally business confidence reached a record high for the second quarter running.
This was underpinned primarily by expectations of strong sales growth in the year ahead, especially in the domestic market where a record rise of 7.4% is predicted.