Rural Scotland Business Panel Survey

9. Conclusion

This wave the survey took place against a backdrop of rising costs and economic uncertainty. Though widespread COVID-19 lockdown restrictions had eased, some businesses were still operating in a different way than they had been pre-pandemic. The first quarter of the year saw reports of increased inflation, interest rates and record fuel prices. These challenges were compounded during February and March 2022 by the invasion of Ukraine by Russian forces. The resulting economic sanctions and reduced supply chains increased prices in some sectors.

Against this background, the survey highlighted some key findings in relation to the attitudes, behaviours and priorities for rural businesses at this time:

1. Rural businesses were less confident in the economy and less optimistic than they had been at the end of last year. Just over half were confident in the economic outlook for Scotland, while just over two fifths were not, and overall economic optimism was down on the previous wave. Most businesses were still optimistic about their own prospects for the next 12 months, though to a lesser extent than in the previous wave.

2. Recovery from COVID-19 seemed to have stabilised, with levels of operation broadly similar to those reported at the end of last year. Most businesses were operating at, or above, the level they were before COVID-19, while around two fifths were still operating below their pre-pandemic levels

3. Costs were a big issue for businesses, reflecting the widespread cost increases being reported at the time of survey. Almost all were concerned about increasing costs, particularly to the cost of energy and fuel. Costs of goods, transporting goods, and labour were also mentioned as areas of concern. In response to rising costs, around half of businesses were increasing their own prices.

4. The main areas of focus for rural businesses were their resilience, enhancing their productivity, and compliance with regulations or legislation. Fewer than half were currently focussing on reducing carbon emissions, supporting their growth, succession planning, and addressing labour challenges.

5. Workforce was seen as a key factor in helping businesses achieve their plans. However, workforce-related challenges were common, including cost of labour, skills shortages, vacancies and absences.

6. There was fairly high use, or intended use, of new forms of technology and most businesses had taken steps to move to low carbon ways of working. However, cost remained a key barrier in both these areas.