SCC calls for growth-focussed Budget as latest quarterly economic survey reveals business confidence at new low

WL Chamber
6 days ago
3 min read

On the eve of the Scottish Budget, the Scottish Chambers of Commerce’s latest quarterly economic survey reveals a business community increasingly pessimistic about growth prospects.

Read the full report below:

The SCC’s survey of over 550 businesses between 10 November and 8 December, produced in partnership with the Fraser of Allander Institute, shows that confidence dipped again in the final quarter of 2025 to its lowest point of the year.

For the first time in three years, more firms expect turnover to fall than to rise in the next quarter.

Pressure from labour costs and taxation continued to dominate firms’ concerns in this period. Two thirds of businesses – the highest number recorded since Q1 2023 – expect to raise their prices over the next quarter.

Key findings include:

Business confidence continues to weaken: 40% of firms reported a fall in confidence, up from 35% last quarter, while only a quarter reported an improvement. This represents the weakest confidence reading recorded in 2025.
Investment remains subdued: Only 15% of firms are increasing investment in Q4, the lowest level recorded in 2025. Looking ahead, twice as many are expecting investment to fall (32%) as to rise (16%) in the coming months, the highest figure recorded this year.
Near-term growth prospects have softened: More firms expect turnover to fall (33%) than to rise (27%) in the next quarter. This is the first time this has occurred in three years (Q4 2022).
Cost pressures remain entrenched: 77% of firms report increased pressure from labour costs, a level consistently reported by more than three-quarters of firms throughout 2025. 75% of all respondents now cite tax as a concern.
Rising costs increasingly passed on to consumers: 65% of firms are expecting to raise prices, up ten percentage points over the quarter and the highest level recorded in 2025. This is also the highest figure since Q1 2023 (73%).

Doug Smith, Vice President of the Scottish Chambers of Commerce, and Chair of the SCC Economic Advisory Group, said:

“These results point to an economy that is losing momentum rather than turning a corner. Worryingly, confidence has weakened again, sales are under pressure, and firms are cutting investment at a time when growth should be gathering pace.

“Particularly concerning is the forward-looking picture: more firms expect turnover and investment to fall than to rise for the first time in three years; rising labour costs and taxation worries are now firmly embedded, with pricing decisions entrenching inflationary pressures for consumers as well as businesses.

“With investment faltering and confidence fragile, policy choices at Holyrood and Westminster matter more than ever. A clear focus on competitiveness, skills and planning, alongside a stable and predictable tax environment, is essential to restore confidence and put the economy back on a path to sustainable growth.”

Dr Liz Cameron OBE, Director and Chief Executive of SCC, said:

“After a tough Autumn Statement and fresh pre-Budget jitters ahead of the Scottish Government’s announcements tomorrow, business confidence is at a worryingly low level.

“Our largest survey in years underlines the growing strain placed on businesses by the tax system, and a lack of meaningful policies to tackle the structural challenges facing our economy.

“In December, we urged the Scottish Government to use their Budget to boost planning capacity, prioritise skills funding, and freeze business rates.

“Since then, businesses across every sector have been hit with eye-watering rates hikes, with some warning the increases will price them out of existence this year.

“Tomorrow is a pivotal moment. The Scottish Government must act decisively to restore confidence and put Scotland’s businesses back on the front foot.”