Carbon Capture worker

Confidence, performance and automation highlighted in latest South of Scotland business survey

Business confidence across the South of Scotland is returning to pre-cost of living crisis levels, according to the latest business panel survey for the region.

Despite a backdrop of continued economic challenges, confidence is now at its highest level since early 2022.

The survey, carried out in May and June 2023 with 610 local businesses, showed business performance was mixed, in line with the previous survey.

Main findings

Most businesses said they had either performed well or had been fairly steady.

While sales or turnover performance was also fairly mixed, this did not always translate into profit - more businesses reported a decrease in profit margins than reported an increase.

Certain sectors performed differently to others, with those in the accommodation and food services and wholesale and retail sectors being more likely to say they had struggled in the past six months.

Overall, businesses had a positive outlook about their future. For the next six months, most expected to either sustain or improve their level of performance.

However, around a quarter of businesses said they would be unable to survive more than six months on their current cash reserves, while one-in-ten had no cash reserves at all.

As seen in previous waves, the top financial concern for businesses was high and increasing costs. Businesses were also concerned about reduced profit margins, cash flow, having to charge higher prices, and being unable to invest.

Most businesses were taking action to improve their productivity and competitive position, and to ensure they had access to the skills and resources they needed. However, this varied, with smaller businesses (with 0-4 staff) less likely to be taking any action.

Automation was not being used widely by businesses in the region. Fewer than a third were using it, and most of the remaining businesses said they were unlikely to use it in future.

Jane Morrison-Ross, Chief Executive of SOSE, said:

“Once again, the South of Scotland Business Panel survey reflects the challenging economic conditions facing businesses, who continue report mixed performance, and have concerns around costs, profit and cash flow.

“However, it is heartening to see that the majority of businesses in the region have a positive outlook about their future, and most expected to either sustain or improve their level of performance.

“With each wave of our survey, we are building a more detailed picture of the operating conditions in the South.

“This survey had a particular focus on how businesses are investing to adapt to change and challenges, with companies also asked to reflect on their use of automation now and going forward.

“This information shows the drive and commitment of businesses within the region and is hugely important. 

“SOSE, alongside our local and national partners, will use it to ensure we provide the right support and guidance for our businesses across the South of Scotland.”

Zoe Meldrum, SOSE’s Economic Research Insights - Lead Analyst, added:

“Thank you to all businesses who recently participated in the latest wave of the South of Scotland Business Panel Survey. 

“Now in its seventh wave, we are grateful for all participants who have engaged with this research to date. 

“Our participants provide vital first-hand information on how their businesses are performing in our region and how they are responding to challenges and opportunities.  

“Panel members are the first port of call to participate in the survey and any businesses in the region interested in joining can contact

“Panel members may not be asked to participate in every survey wave, and can ask to be removed at any time.“