www.fsb.org.uk/scotland
SCOTLAND Q1 2018 SMALL BUSINESS INDEX Scottish small business confidence is improving but the economic Small Business Confidence outlook remains fragile. In the first quarter of 2018, the Scottish 60 Small Business Index climbed to -17.8 points. However, Scottish small business confidence remains low and lags well behind that of the UK 40 as whole. This reflects the divergence of economic fortunes seen over the last year. The most recent available data show the Scottish 20 economy is growing at half the pace of the UK as a whole, at just 0.2% quarter-on-quarter. 0
Q1 2018
Q4 2017
Q2 2017
Q4 2016
Q2 2016
Q4 2015
Q2 2015
Q4 2013
Q3 2013
Q4 2014
Q2 2013
Q1 2013
Q2 2014
Q4 2012
Q3 2012
-40
Q2 2012
-20
Q1 2012
Scottish small businesses reported further decreases in revenue and profits in the first quarter of the year and continue to face tough market conditions. However, they are more positive about future revenue growth in the coming quarter.
The primary cause of concern was the state of the domestic economy. Consumer demand, a key factor, was also widely cited. Both are more frequently cited than they were a year ago, reflecting the pressure Scotland SBI UK SBI Source: FSB Small Business Index. put on household and business budgets by inflation over the period. It seems that these heightened concerns are stifling investment intentions, which also declined at the start of 2018. Net balance of small firms in Scotland reporting revenue/profit growth Small business confidence across the UK returns to positive territory. The UK-wide Small Business Index climbed from -2.5 points 30% in Q4 2017 to +6.0 points this quarter. Previously, small business 20% confidence had fallen in each quarter since Q2 2017. The UK economy expanded by 0.4% in the fourth quarter of 2017, taking GDP growth 10% over 2017 to 1.7%, only slightly below the 1.9% recorded in 2016. 0%
-10% -20%
Q2 2018
Q1 2018
Q3 2017
Source: FSB Small Business Index
0%
-10%
Q2 2018
Q1 2018
Q4 2017
Q3 2017
Q2 2017
Q1 2017
Q4 2016
Q3 2016
Q1 2016
Q2 2016
Q4 2015
Q3 2015
Q1 2015
Q2 2015
Q4 2014
Q3 2014
Q1 2014
Q2 2014
Q4 2013
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q1 2012
-20% Q2 2012
This trend looks set to continue with small businesses expecting strong employment growth for the second quarter of the year. This will be welcome news given that figures from the Office for National Statistics (ONS) show the employment rate in Scotland declined by 0.2 percentage points between November 2017 and January 2018.
Q1 2017
More positively, the findings suggest that revenues will recover – a net balance of 4.2% of small businesses anticipate that revenues Revenue Profit will climb in the coming three months. Still, as consumer spending growth is expected to be weak this year, the outlook for Scottish small businesses remains uncertain. Net balance of firms reporting employment growth, Scotland Small businesses report another quarter of reduced headcount. In the first quarter of the year, a net balance of 4.6% of small businesses 20% in Scotland reported reduced employment levels. Although the overall direction remains negative, however, it should be noted that 10% fewer businesses are reducing staff numbers.
Q3 2016
Q1 2016
Q3 2015
Q1 2015
Q3 2014
-30% Q1 2014
More Scottish small businesses see sales decline. In the first quarter of 2018, a net balance of 13.5% of Scottish small businesses reported a fall in revenues over the past three months. This is significantly worse than the 6.7% recorded in the third quarter of 2017. More small firms have seen sales fall than have seen them rise in each index reading since the start of 2017.
Source: FSB Small Business Index