www.fsb.org.uk/scotland
SCOTLAND Q4 2019 SMALL BUSINESS INDEX Scottish small businesses are some of the least confident in Small Business Confidence the UK. Confidence fell by 13.7 points compared to Q3 2019, to stand 50 at -27.2 in Q4 2019. The only region where small businesses were less confident about the future was London, where the index fell to -36.4 40 this quarter. Despite this fall in confidence, year-on-year the Scottish confidence index climbed by 5.5 points, largely as the risk of a 30 no-deal Brexit had faded compared to the final quarter of 2018. 20 10 0 -10 -20 -30
Despite the long running decline, year-on-year the net balance is up 5.4 percentage points, suggesting signs of improvement for some small businesses. This perhaps accounts for the slightly brighter profit forecast for the coming three months.
UK SBI
Q4 2019
Q4 2018
Q2 2019
Q4 2018
Q2 2018
Q4 2017
Q2 2017
Q4 2016
Q2 2016
Q4 2015
Q4 2014
Q2 2014
Q4 2013
Q4 2012
Scotland SBI
Q2 2015
Scottish businesses continued to see gross profits fall in Q4. A net balance of -12.9% of small businesses in Scotland reported falling gross profits over the last three months of 2019. This is a decrease of 0.8 percentage points on the -12.1% net balance seen in Q2, when this question was last asked. The proportion of Scottish small businesses reporting falling profits has now consistently been higher than those reporting increasing profits since Q3 2015.
Q2 2013
-40 Q2 2012
Across the UK small business confidence fell by 13.5 points in Q4 to -21.6. The drop in UK-wide confidence leaves a gap of 5.6 points between the level of confidence recorded in Scotland and the UK average, a marginally larger gap than the 5.4 points in Q3. Initial estimates1 suggest an expansion of Scottish output of 0.3% in Q3, which is behind UK growth of 0.4%. The recovery from the contraction in output recorded in Q2 2019 (-0.2% growth across both Scotland and the UK as a whole) was largely driven by businesses reacting to uncertainty over how and when the UK would leave the EU. However, with further uncertainty, including the extension of negotiations with the EU in October, and the general election in December, growth seems to have slowed further in Q4. This is reflected in the outlook of small businesses across the country and especially in Scotland.
Source: FSB Small Business Index.
Net balance of small firms in Scotland reporting revenue/profit growth 30% 20% 10% 0% -10%
Revenue
1 https://www2.gov.scot/Resource/0054/00549092.pdf
Profit
Q4 2019
Q2 2019
Q4 2018
Q2 2018
Q4 2017
Q2 2017
Q4 2016
Q2 2016
Q4 2015
Q2 2015
Q4 2014
Q2 2014
Q4 2013
Q2 2013
Q4 2012
-30%
Q2 2012
-20%
Source: FSB Small Business Index