Business confidence climbs in new South of Scotland survey
Confidence in the economy has risen to its highest level for over three years, according to the latest South of Scotland Business Survey.
The latest survey of 600 businesses across the South reveals 48% are confident in Scotland’s economic outlook, compared to 37% at the last survey in late 2024.
This is the highest level of confidence recorded since early 2022.
The South of Scotland Business Panel survey sees Ipsos – on our behalf - interview companies and social enterprises from across the region each year.
It provides a temperature check of business confidence and helps identify challenges and opportunities.
The findings of the latest survey, carried out in June and July 2025, highlights businesses are striving to grow, with fewer looking to downsize, while the vast majority had identified areas to develop their organisations.
The survey also highlights the range of external and national challenges South of Scotland businesses face, with business performance mixed.
The full survey is available to view here.
Key findings
- Confidence in the economic outlook for Scotland increased: 48% of businesses were confident - compared to 37% in late 2024, while 49% were not (compared with 61%). This is the highest level of confidence since early 2022.
- In terms of aspirations, the largest percentage of respondents were striving to grow (42%), followed by 38% content at current level and 17% looking to downsize.
- Around a third of businesses identified their biggest strengths as understanding their market and opportunities (34%), adaptability to changing circumstances (33%) and their workforce (32%).
- For the first time, businesses were asked how long they had been operating. Most businesses (59%) had been operating in the South of Scotland for more than 25 years.
- Most respondents (87%) said that there were areas that they would like to develop for their business. The most commonly selected areas for development included their workforce and workforce wellbeing (41%), premises or equipment (40%), and new domestic market opportunities (37%).
- More than half of businesses felt that tourists and visitors coming to the area (56%) was an opportunity for them. This was followed by renewable energy projects (42%), community-led projects or developments (40%), large construction or infrastructure projects (33%) or companies investing in or establishing a base in the area (33%).
- Views on business performance over the last six months were mixed, with 31% saying their business had performed well, 40% saying business had been fairly steady, and 28% saying they had struggled.
- Most respondents considered current economic conditions (66%) and the cost of labour (60%) to be the biggest risks to their business.
- When asked about automation and artificial intelligence, a higher proportion of businesses considered it be an opportunity (27%) rather than a risk (14%) to their operations.
Jane Morrison-Ross, Chief Executive at SOSE, said:
“It’s wonderful to see the upturn in business confidence in the latest South of Scotland Business Survey.
“It has been a difficult period, but we know our businesses are resilient, ambitious and ready to grow.
“We have key, international businesses in the region, like Johnstons of Elgin who have just opened the new Hawick facility, which cements their place in the South and supports their ambitious plans for sustainable growth.
“We are delighted to confirm the return of the Scottish Government-supported Pathways programme which supported 269 business founders in the South last year, and launched 100 new businesses, and the revolutionary Kight PowerHub which has potential to revolutionise domestic energy in the region, and beyond.
“Our ambitions for the South of Scotland mirror those of our businesses – to create a resilient, sustainable and growing economy that shows why the South is the place to be.”
Adam O’Sullivan, SOSE’s Lead Analyst for Economic Insights, added:
“The South of Scotland Business Panel provides critical intelligence on current business perspectives across the region, and their priorities for the future.
“We appreciate the time taken by the 599 businesses to complete the latest survey – it is very important to the future of the region.”