NEARLY one-third of businesses in Scotland have seen their profit margins on domestic sales hit by rising costs amid sterling weakness in the wake of the Brexit vote, a survey reveals.
The research, published today by Scottish Chambers of Commerce, also shows most companies north of the Border expect the fall in sterling to increase their costs in the coming year.
Of the Scottish businesses surveyed, 31 per cent reported that the recent devaluation of sterling was having a negative impact on domestic sales margins. The survey found 56 per cent of Scottish businesses expected the fall in the pound to increase their cost base over the next 12 months.
And 49 per cent of Scottish companies believe they will have to increase the prices of their products and services during the coming year.
In terms of export margins, 21 per cent noted a positive impact from the fall in the pound, with only three per cent reporting a negative effect.
Liz Cameron, chief executive of Scottish Chambers, said: “This research among Scottish businesses, together with our more detailed quarterly economic indicator, has revealed a clear pattern of expectations of rising costs as a result of currency fluctuations.
“In turn, this is expected to lead to increased business costs and pressures on margins, and, for many smaller businesses, there is little they feel they can do to manage currency risks.”
Separately, a survey published today by accountancy firm Grant Thornton shows the number of people working for the top 100 privately-owned limited companies in Scotland fell from about 116,284 to 110,632 in the latest year.
Grant Thornton said these employment statistics reflected the “challenging times facing the business community”. Its Scotland Ltd 2016 report is compiled using the latest publicly available accounts, as of September 1, 2016, of Scotland’s “best-performing” private businesses.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here