Westminster Asleep at the Wheel, says Stirling MP
New analysis by the Scottish Chamber of Commerce has offered fresh insight into business sentiment across Scotland, as global economic shocks and UK Government policies continue to impact on the local Stirling and national Scottish economy.
The Scottish Chambers of Commerce, in partnership with the Fraser of Allander Institute, work to produce the Quarterly Economic Indicator (QEI – the longest running data series of its kind, providing a regular and respected insight into the fortunes of key Scottish sectors.
Their most recent data set from Q4 2023 showed a stabilisation in price rises, yet inflationary concerns remain high amid flatlining investment and a tight labour market. Firms also highlighted recruitment difficulties and the impact of high interest rates on their confidence and operations.
The report comes as local Stirling businesses struggle with the impact of both the cost of living crisis on their own bills, and suppressed discretionary spending from consumers amid record-high fuel bills, food prices and housing costs.
Local Stirling MP Alyn Smith said:
‘These figures make grim reading for Scotland’s businesses, and should jolt policymakers. Industry figures across the UK are crying out for assistance, and a recognition of how difficult the picture is at the moment. We’ve a self-reinforcing crisis of high interest rates, rising inflation, high input costs and falling consumer incomes and confidence.
‘The UK Government has the macroeconomic powers to act decisively to stabilise the ship – instead, we’ve seen flawed tax cuts and a resistance to invest at the levels we need to catch-up with our European peers.’
‘In Stirling, I want to see smarter use of capital spending to keep our local economy growing, investing in much needed infrastructure which in turn will support business growth. A tight labour market is leading to recruitment issues, a situation not helped by Brexit and our departure from the Single Market. The Scottish Government’s £2.4 billion investment into colleges, universities and the wider skills system is welcome, and must work alongside workforce investment from businesses themselves to upskill and develop Stirling’s local skills base.’
- INFLATIONARY CONCERNS EASE BUT REMAIN HIGH: Concern over inflation has fallen to 52% for this quarter – compared to 75% in the last quarter – and this is the lowest that concern from inflation has been in all of 2023. 52% is still 20 percentage points higher than the 32% recorded pre-inflation crisis in Q1 2021.
- INVESTMENT IS STILL FLATLINING: While on balance, more firms continue to report increases in investment than falls, over half of firms continue to report no changes to both total (55%) and training (54%) investment.
- INTEREST RATES RISES REMAIN A CONCERN: Concern over interest rates was reported by half of firms in the last quarter, that has now fallen by 10 percentage points to 40% for this quarter but is still significantly higher than the 15% recorded in Q1 2021 pre-inflation crisis.
- PRICE RISES HAVE STABILISED: Less firms are indicating that they will raise prices this quarter compared to last, following the trend over 2023. Four in 10 now indicate they will raise prices in the next quarter compared to 48% in the last quarter.
- LABOUR MARKET REMAINS TIGHT: Recruitment difficulties remain challenging, impacting 40% of firms this quarter, with associated labour costs still affecting seven in 10 firms.
- This survey was conducted from 6th November – 4th December 2023. 420 firms responded to the Q4 2023 edition of the survey.
- 95% of respondents to the survey were SMEs: these are businesses with less than 250 employees.
- The Quarterly Economic Indicator is Scotland’s longest-running business survey, operating since 1990.
- Scottish Chambers of Commerce is Scotland’s largest business network with over 12,500 business members, across a network of 30 regional Chambers of Commerce.