Rural Scotland Business Panel Survey February 2023

3. Future viability

Key findings

The majority (82%) of businesses were confident they would be viable over the next six months, while 16% were not. Confidence was down on the previous wave. Tourism and food and drink business were less confident than average.

Among those that were confident in their future viability, 47% expected to be operating at about the same level in six months’ time, while 15% expected to be operating below and 12% over and above their current levels.

Among those that had struggled in the past six months, 25% expected to still be operating in six months’ time, but at a loss, 11% expected to have downsized and 10% expected to have ceased operating completely.

Confidence in future viability

The majority (82%) of businesses were confident they would be viable over the next six months, while 16% were not (Figure 3.1). Confidence was down on the previous wave (June/July 2022) when 88% were confident and 11% were not.

Variation in confidence

Confidence was higher than average among businesses in the Highlands and Islands - 85% were confident compared with 82% overall (while 82% were confident in South of Scotland and 80% in rest of rural Scotland).

Confidence was also higher than average among:

• those with 25+ staff (94% confident) and 11-24 staff (88%),
• financial and business services businesses (87%), and
• those that had performed well (94%) and were able to plan more than 12 months ahead (94%).

Confidence was lower than average among:

• those with 0-4 staff (18% not confident),
• tourism (26%) and food and drink (20%) businesses,
• those that had struggled (42%) and those unable to plan more than a month ahead (29%).

Expected performance in six months’ time

Among those that were confident in their future viability, 47% expected to be operating at about the same level in six months’ time, while 15% expected to be operating below and 12% over and above their current levels. A quarter (24%) felt it was too soon to say. (Figure 3.2).

Variation in expectations

Expectations were linked with recent performance. Those that had performed well were more likely to expect to operate about the same level (51%) or over and above (15%) their current levels. Those that struggled, on the other hand, were more likely to feel it was too soon to say (34%) how they would be operating.

Similarly, those that were able to plan beyond the next 12 months tended to anticipate operating at about the same level (58%) or over and above (19%) current levels. Those that were unable to plan more than a month ahead were more likely to feel it was too soon to say (31%).

Elsewhere, food and drink businesses were more likely to anticipate operating about the same level (56%).

Expected operating position in six months’ time

Among those that had struggled in the past six months, 25% expected to still be operating in six months’ time, but at a loss, 12% expected to have downsized and 8% expected to have ceased operating completely. For 44%, it was too soon to say how they would be operating. (Figure 3.3).

Variation in expectations

Food and drink businesses were more likely to say they would be still operating, but at a loss (34%), as were those that had struggled in the last six months (29%). Otherwise, findings were similar across different types of business.