Bucking a trend of decline south of the border, the percentage of Scottish small business owners predicting growth for the next three months has hit a five-year peak at 36% (the highest figure in Scotland since Q3 2019) – according to the latest quarterly data from Novuna Business Finance.
The findings for Scotland contrast with the UK national average, where the percentage of small business owners predicting growth has dipped to a nine-month low (33%). Whilst 45% of UK enterprises see Q1 as a standstill period, there is a four-year high across the UK in the percentage of small businesses saying they will contract by the end of March (13%) and the percentage of enterprises that fear closure in the next three months has hit a two-year peak (8%). By comparison, there was no rise in the percentage of Scottish small business that predicted contraction (9%) or closure (6%).
The findings are from Novuna Business Finance’s Business Barometer study, which surveyed 1,300 small business owners on their growth outlook.
The rise in growth forecasts for Scottish small businesses aligns with 70% of them working on new initiatives to support future growth. Key growth projects for Q1 2025 included: keeping fixed costs down (56%), improving cash flow (38%), re-assessing finance commitments (21%) and expanding into new markets overseas (20%).
Joanna Morris, Head of Insight at Novuna Business Finance, commented:
“Over the last 11 years, our research suggests that small businesses are remarkably resilient when it comes to their quarterly growth forecasts. Whilst at first glance the national average is down, there is a positive picture emerging in Scotland – and the investment many enterprises are making to create future growth is also impacting their short-term confidence.”
“From the Business Barometer study over the last decade, it is clear that there are often fine margins between businesses that predict growth or contraction and decline. Now is a time for small businesses to be supported, so caution and contraction can be replaced by confidence and belief. At Novuna Business Finance, we are serious about helping established small businesses put plans in place to achieve their true potential and, midst the market uncertainty, small business confidence this year will be key to the new Government delivering on its pledge to deliver economic growth.”
