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Scottish Business Monitor Q3 2024

This report summarises the key results from our latest Fraser of Allander Institute (FAI) Scottish Business Monitor.

The survey sampled over 350 firms in August and September from across the Scottish economy, examining business sentiment in Q3 2024 and the outlook for the year ahead.

In Q3 2024, business sentiment remains consistently positive. Firms are reporting an increase in employment levels, and cost pressures are easing. Recent interest rate cuts are helping a more favourable climate for investment, leading to a noticeable reduction in the challenges businesses are facing compared to this time last year.

Despite these positive indicators, some challenges remain. Ongoing issues related to exports, investment, staff availability, and rising employee costs continue to pose significant hurdles for businesses. Consequently, while growth expectations are encouraging, they are somewhat tempered by these persistent concerns. As a result, one in four firms are now expecting modest growth in the Scottish economy over the coming year.

Our latest results also show that:

  • Scottish businesses continue to show steady confidence in their activity levels for the next six months, with expectations for business volume holding firm at a net balance of 16 to 17. This key indicator has remained stable in 2024, above the pre-pandemic average of 14 and significantly higher than the 2020-2023 average of 7.
  • For the second quarter in a row, fewer businesses are saying their costs have gone up. Wages and employee costs remain the biggest concerns, but the pressure from borrowing costs has eased significantly.
  • Most businesses expect economic/ business uncertainty (85%), staff availability (78%), and political uncertainty (75%) as the major concerns in the coming three months.

Authors

João is Deputy Director and Senior Knowledge Exchange Fellow at the Fraser of Allander Institute. Previously, he was a Senior Fiscal Analyst at the Office for Budget Responsibility, where he led on analysis of long-term sustainability of the UK's public finances and on the effect of economic developments and fiscal policy on the UK's medium-term outlook.

Brodie is a Knowledge Exchange Assistant at the Fraser of AllanderInstitute.She has recently completed an MSc in Applied Economics at the University of Strathclyde and has a first-class Honour’s degree in Economics and Politics from the University of Glasgow

Part of Collection

The quarterly Fraser of Allander Scottish Business Monitor, in partnership with Addleshaw Goddard, provides a snapshot of activity and business sentiment in the Scottish economy.