Rural Scotland Business Panel Survey October 2022

8. Conclusion

Once again, this survey was conducted against difficult economic circumstances. This was the first wave carried out since the lifting of COVID-19 restrictions across Scotland. However, fieldwork took place in the midst of increased inflation, rising energy prices and widespread reports of a "cost of living crisis" with the Bank of England warning of a likely recession at the end of the year.

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 this wave. Fewer than half were confident in the economic outlook for Scotland and overall economic optimism was lower than the previous two waves.

2. Most businesses were performing either in line with or over and above their expectations on specific aspects of performance. However, around a third were operating behind where they wanted to be in relation to productivity, while over a quarter were behind on their adoption of technology, and around one in five were behind on skills development and competitiveness.

3. Growth aspirations remained similar to those seen in recent waves, with around four in ten businesses striving for growth, a similar proportion wanting to retain their current level of performance, and around one in ten wanting to downsize.Smaller businesses and those in the food and drink sector tended to want to remain as they were or downsize, while larger and tourism businesses were more likely to seek growth.

4. In spite of falling confidence in the economy, businesses demonstrated a sense of confidence about their own future. Most businesses were confident they would be viable over the next six months. Rising costs was seen as the biggest risk to their viability, but most felt equipped to deal with this and other risks.

5. There was a mixed outlook for the 12 months ahead. While around a quarter of businesses were actively seeking out new ways of doing things, others were either open to change but not actively seeking it or minimising changes and hoping to continue as they were.