Confidence among Scotland’s small businesses has fallen to its lowest level since the height of the pandemic, new figures from the Federation of Small Businesses (FSB) reveal.
FSB’s Small Business Index (SBI) found confidence fell to -67.2 in Q4, 2024, its lowest level since Q4, 2020, when it stood at -69. The latest results represent the third consecutive quarterly slide in small business optimism north of the border, dropping from –41.2 in Q3 last year.
The growing negative sentiment reflects uncertainty surrounding the broader economy, and falling confidence UK-wide, with the UK SBI figure standing only slightly higher at -64.5 in Q4.
Andrew McRae, FSB Scotland Policy Chair, said: “These worrying results underline that we need urgent, concrete government action on the issues that keep small business owners awake at night.
“So many of the pressing issues come down to cost and cashflow. That is why, for example, the government’s plans to tackle late payments, the scourge of many small businesses in Scotland, cannot come soon enough. It must also be acknowledged that the upcoming Employment Rights Bill is a serious concern for small firms, with nine out of ten owners saying they are worried about its introduction.
“We are keen to gain a fuller picture of precisely what factors are shaping this gloomy outlook and this is one of the key focuses of our largest research project to date, The Big Small Business Survey. To that end, we would encourage as many small businesses in Scotland as possible to take part.”
Six out of 10 respondents in Scotland (59%) cited the performance of the domestic economy as the biggest barrier to the growth of their own business. Three quarters (74%) experienced rising costs in Q4, largely due to increases in utility bills, as well as labour and tax costs.
The net balance of small businesses reporting revenue growth in Scotland fell to -36.7, compared to -13.1 in the previous quarter. Fewer than one in five (17.9%) saw revenues grow, the lowest proportion since Q1, 2021.
Looking further ahead, there was a positive net balance of Scottish firms looking to expand in the next 12 months, at 5.4%. However, this represents a large drop from the previous quarter (30.4%) and is significantly below the UK average for Q4 of 19.2%.
ENDS
For further information contact
Euan McGrory [email protected] 07734 509227
Notes to Editors
- The Big Small Business Survey is FSB Scotland’s largest single research project and offers all self-employed people and small business owners across Scotland the chance to share their views on the challenges facing them in 2025. The survey can be found here.
- FSB surveyed 1,396 small firms for the Q4 2024 SBI between 10 December and 30 December, with 131 responses from Scotland. Statistics are based on a weighted analysis of survey results. Weighting is applied to ensure figures are representative of the country’s business population.
- The Federation of Small Businesses is a non-profit, non-party political organisation that offers its members a wide range of business services, including advice, financial expertise, and a powerful voice heard in governments.
- Micro and small businesses comprise almost all enterprises in Scotland (98%), employ more than 900,000 people and turnover £93bn annually.