SMALL and medium-sized businesses in Scotland are collectively forecasting 117% aggregate growth in their annual turnover over the next five years, having grown in confidence since 2012, a survey has revealed.
Although they have become more optimistic about future growth in the last year, small and medium-sized enterprises (SMEs) in Scotland are adrift of the UK average in terms of their projections of turnover rises over the next five years.
In the UK as a whole, SMEs are forecasting 134% aggregate growth in annual turnover on a five-year view.
The survey, published yesterday by banking group Santander, focuses on businesses with an annual turnover of £20 million or less.
In 2012, Scottish SMEs had forecast 91% aggregate growth in annual turnover over the following five years. However, while their latest projection is a significant improvement on this, it is well adrift of their collective forecast in 2011 of 194% growth in turnover over a five-year period.
The proportion of Scottish businesses citing organic growth as an immediate priority jumped to 35% in the latest survey, from 11% in 2012, having stood at 33% in 2011.
In what Santander hailed as a further sign of increased confidence, the proportion of Scottish business owners looking to start a new venture climbed to 12% from 2% in 2012.
There was a drop in the proportion of Scottish businesses citing "survival" as an immediate priority, to 60% from 69% in 2012. However, the 60% figure was still greater than the corresponding proportion of 55% in 2011.
Santander's survey showed a growing appetite for acquisitions among UK SMEs.
Of Scottish SMEs surveyed, 68% reported that a challenging trading environment was the biggest barrier to growth, up from 41% in 2012. Access to capital was reported by 31% of Scottish businesses as a major barrier to growth, up from 21% in 2012 and 10% in 2011.
Graham Silcock, regional director in Santander's corporate and commercial banking division, said: "Understandably, many businesses in Scotland remain cautious, in the current trading environment. However, our latest growth survey reveals a more optimistic five-year growth outlook compared to 2012. It has also found that since 2011, when our first report was published, more SMEs in the UK are looking at acquisitions to spur growth as well as investing in organic expansion."
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