Scottish businesses are bracing themselves for “another challenging year” according to experts, with a survey finding just over half say they are already being impacted by rising fuel prices.
The latest View business sentiment tracker found 25% of respondents said their most recent financial year had gone worse than expected, up from 16% a year ago.
Meanwhile, almost half (47%) now identify a weak economy as the most important challenge facing their business, compared with 36% this time last year.
The figures suggest many businesses are settling in for another challenging year rather than expecting a significant improvement in trading conditions
Law firm MFMac conducted the biannual survey of senior decision makers in 104 businesses.
They said the findings show many businesses are still contending with sluggish economic conditions, cost pressures and geopolitical uncertainty.
The firm also pointed to energy costs as a particular concern, against the backdrop of increased volatility in wholesale oil and gas prices amid tensions in the Middle East.
Chris Harte, chief executive of MFMac, said: “The figures suggest many businesses are settling in for another challenging year rather than expecting a significant improvement in trading conditions.
“The energy findings are particularly telling.
“Continued instability in the Middle East and disruption around key shipping routes are feeding through into wholesale prices and creating uncertainty for businesses here in Scotland.
“At the same time, most firms are focusing on stability rather than expansion.
“That points to a business community that remains pragmatic and resilient, but realistic about the economic pressures it expects to face over the next year.”
Just 38% of Scottish business leaders said they currently hedge their energy costs, and over half (51%) report that rising fuel prices are already having a material impact on their business.
The survey also points to continued caution around growth and investment in the business community.
Two-thirds (66%) said they do not expect to increase headcount over the next six months, while fewer than one in 20 identified entering new markets as a business priority.
The View is published every six months as a barometer of Scotland’s business landscape, and aims to provide insights to both the business community and policymakers at a time of economic change.