1000 north businesses have their say in Highlands and Islands Enterprise business panel survey
Register for free to read more of the latest local news. It's easy and will only take a moment.
Businesses in the Highlands and Islands continue to be challenged by increasing costs, economic uncertainty and supply chain issues.
This is according to the findings of the latest business panel survey undertaken by Ipsos MORI for Highlands and Islands Enterprise (HIE) in October.
More than 1000 businesses in the region were contacted for their views on topics such as financial health, priorities and concerns. Before the emergence of the Omicron Covid-19 variant, the survey highlighted that the region’s economy was showing clear signs of resilience and recovery.
However, the emergence of the new variant and subsequent changes in public health guidance is inevitably a setback for some key sectors.
Businesses were questioned at a time when they were continuing to grapple with a range of economic challenges including ongoing recovery from the pandemic, increased inflation, record fuel prices, widespread reports of fuel shortages and a wider supply chain crisis.
Against this backdrop, more than four out of five (82 per cent) said they were optimistic about their prospects over the coming 12 months and 45 per cent said they were striving for growth. Nearly two-thirds (64 per cent) said they were confident in Scotland’s economic outlook.
Most businesses (66 per cent) said they were operating at their pre-pandemic level (44 per cent) or above (22 per cent). Companies in the financial and business sector appear more likely to be operating at above pre-pandemic levels, while those in creative industries and tourism are more likely to operating below.
Top priorities identified for the year ahead were keeping pace with new technologies (54 per cent), innovating and evolving (51 per cent) and reaching new markets (40 per cent).
Moving to low carbon ways of working was identified as a priority by 70 per cent of businesses. While 43 per cent see this as a longer‐term focus, nearly all businesses (93 per cent) are already taking action to reduce emissions.
Around three-quarters (76 per cent) were experiencing some form of supply chain challenge. This was dominated by access to goods, materials or services and compounded by export processes and transportation. All of these were contributing to increased costs, identified as a major concern for 82 per cent of businesses.
The survey also showed some signs of import substitution. The proportion of businesses accessing goods and services locally increased from 70 per cent in June to 85 per cent in October and there was also an increase in those sourcing from elsewhere in the UK (from 62 per cent to 73 per cent).
Labour shortages persist for 57 per cent of businesses, rising to 68 per cent for those in the tourism sector. This was resulting in increased workload for other staff, difficulties in delivering services or fulfilling orders and scaling back production or services.
Martin Johnson, HIE’s director of strategy and regional economy, said: “This has been another really useful exercise in gathering data about the bigger picture of our region’s economy and the main issues and opportunities facing companies across different sectors and locations.
“We welcome so many businesses introducing fair work measures for their staff. The focus for many firms understandably seems to be mostly on the here and now, which is an indication of the impact of uncertainty. Where we all want to get to are the circumstances that allow us to return to more longer-term planning and investment.
“We are very aware of the additional concern around those most impacted by the pandemic, such as tourism, food and drink and creative industries. The emergence of the new Omicron variant will also likely lead to increased challenges in some key sectors.
“As we continue to navigate our way through the ever-changing challenges presented by the Covid-19 pandemic, HIE remains committed to supporting businesses across our region.
“As always, the findings of this report will be used to inform support strategies for HIE and our partners going forward, as well as feeding into the wider rural Scotland business survey, which will be reporting in January.”
HIE’s latest business panel survey was part of a pilot commissioned in collaboration with Scottish Government (SG) and South of Scotland Enterprise (SOSE) to extend its reach to cover all rural Scotland.
The full HIE business panel survey report is available on research and reports page of the agency’s website.
