FEWER than one in five small and medium-sized businesses in Scotland are predicting growth in their own activity in the coming 12 months, with nearly two-thirds expecting trading figures to stay the same, a survey has revealed.

The finding that only 19% of Scotland's small and medium-sized enterprises (SMEs) predict expansion, in the survey conducted by financial services company Close Brothers, would appear to underline the continuing challenges facing businesses in spite of recent better economic growth.

Across the UK, one-third of firms surveyed predicted growth in their own activity within the next 12 months, with more than half expecting a flat position.

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In the latest Close Brothers Business Barometer, 31% of the owners and managers of small and medium-sized businesses in Scotland felt they lacked a winning edge over their competitors. The corresponding proportion in the UK as a whole was just 22%. Of Scottish firms that felt they lacked a competitive advantage, one-third believed this could be attributed to their product or service being too expensive.

Angus Armstrong, regional sales director of Close Brothers invoice finance for Scotland, said: "In today's competitive business landscape, companies need to be able to react quickly to changes in the market, which may mean re-evaluating pricing structures or reconsidering their financial plans."

Shortage of funding for growth was cited by firms as a factor which was preventing them from competing for more business.

Mr Armstrong said: "Firms must be able to access capital to allow them to seize opportunities."