Business survey shows signs of economic recovery and renewed optimism

Highlands and Islands Enterprise.

Want to read more?

We value our content and access to our full site is only available with a  subscription. Your subscription entitles you to 7-day-a-week access to our website, plus a full digital copy of that week’s paper to read on your pc/mac or mobile device.  In addition, your subscription includes access to digital archive copies from 2006 onwards.

Just want to read one issue? No problem you can subscribe for just one week (or longer if you wish).

Already a subscriber?
Subscribe Now

There are signs of emerging economic recovery and renewed optimism in the Highlands and Islands, according to the latest Business Panel survey in the region.

More than half (57 per cent) of businesses in the Highlands and Islands are now operating at pre-pandemic levels or beyond.

Two-thirds (67 per cent) have expressed confidence in the region’s economic outlook for the next 12 months, up from just 37 per cent in October 2020.

Commissioned by development agency Highlands and Islands Enterprise (HIE) and carried out in June this year by Ipsos MORI, the survey questioned more than 1,000 businesses.

Most (93 per cent) respondents were confident in their own ongoing viability, up from 84 per cent at the start of the year.

Four-fifths (80 per cent) were optimistic about their prospects over the next 12 months, compared with 75 per cent pre-pandemic.

Almost all businesses were confident in their abilities to adapt to ongoing restrictions (93 per cent), to changes in customer demands (95 per cent), managing cash flow (90 per cent), and remaining competitive (91 per cent).

Confidence was however lower in their abilities to recruit required skills (59 per cent), accessing new markets (63 per cent), and accessing external finance (66 per cent).

Two-thirds (66 per cent) reported relatively stable employment levels in recent months, and most had the employees they needed.

Almost half (44 per cent) of respondents perceived the UK’s exit from the European Union as having a negative impact on their business, while 11 per cent perceived this as positive.

The majority (89 per cent) said they were able to access the goods and services they required, however 84 per cent reported issues in doing so.

High or increased costs were cited by 70 per cent of businesses, 65 per cent cited delays and 35 per cent said getting the required volume was problematic.

Businesses were most optimistic about selling within the UK and least optimistic about sales to the EU, with 40 per cent of exporting firms experiencing issues in doing so.

This is the 19th Highlands and Islands Business Panel survey commissioned by HIE since 2014.

The findings have been used to inform policy and decision-making on how best to support businesses in the region.

HIE is now working with the Scottish Government and the South of Scotland Enterprise agency to extend the survey to cover all rural Scotland.

Carroll Buxton, HIE’s interim chief executive, said: ‘We already know that the Highlands and Islands region has been disproportionately affected by both the pandemic and the UK’s exit from the EU.

‘The early signs of recovery coming across in this survey reflect the high levels of innovation, flexibility and entrepreneurship that many of them have shown during the most trying of times.

‘Their resilience has been tested to the extreme and having weathered that storm will have helped boost confidence in many instances.

‘This survey also shows what areas of operation businesses are finding most challenging, for example the issues around imports and exports, skills and accommodation.

‘These are areas that we as the development agency will need to look at with our partners to make sure our resources and support programmes are targeted to best effect.’

Meanwhile, Highlands and Islands MSP Donald Cameron said the SNP must not allow its alliance with the Scottish Greens to undermine business confidence.

The Scottish Conservative MSP said: ‘The HIE survey shows that businesses across the Highlands and Islands are beginning to feel more optimistic about the future, but that confidence will be undermined if the Greens, who oppose economic growth, gain undue influence over the Scottish Government.

‘Businesses here need to know that our neglected road infrastructure will be upgraded, a commitment which the Greens have repeatedly questioned.’

In response, the Scottish Greens MSP for the Highlands and Islands, Ariane Burgess, said: ‘The Scottish Conservatives are in no position to talk about the interests of the small businesses of the Highlands and Islands, who are struggling to cope with the impact of the Tory Brexit on labour shortages and the supply chain.

‘While the UK Government has given handouts and tax breaks to party donors, the Scottish Greens are clear that small businesses and social enterprises are at the heart of our communities and key to a green recovery.’