Scotish Business Monitor, 2020 Q4

This report summarises the key results from our latest Fraser of Allander (FAI) Scottish Business Monitor, published in partnership with Addleshaw Goddard. The survey sampled over 500 firms in January from across the Scottish economy. The results examined business sentiment in the final quarter of 2020, and their outlook and expectations through 2021. Our survey results show that business sentiment remained poor in the fourth quarter, with the majority of net balances across metrics such as volume of business, employment and turnover, negative for the entirety of 2020.

We also found that:

• More than one in every ten food & accommodation services businesses reported that their
  chance of survival over the next six months was unlikely or very unlikely, almost double that of the Scotland average.
• The construction industry continued its recovery, going from the sector with the lowest sentiment in the spring to the highest sentiment in the fourth quarter of the year.
• Since the last quarter, more businesses are reporting that home working has negatively affected performance management of staff and productivity levels, but a larger number are also expecting to permanently reduce their office footprint.
• Business ratings of how the Scottish and UK Government have handled the public health crisis have remained unchanged over the quarter. However, ratings on understanding the challenges that businesses face and supporting businesses through the pandemic have fallen slightly for both Governments.
• 38% of businesses say the level of government support has been sufficient or very sufficient, while 40% of businesses say it has been insufficient or very insufficient.
• In particular, more than half of all Strategic Framework Business Fund applicants said that the level of support was insufficient.
• Of the businesses who trade with the EU, 57% reported negative or very negative impacts on their trade, while 1% reported positive impacts.