By Ian McConnell

Business Editor

THE proportion of Scottish businesses reporting problems in hiring people for non-management roles is the highest since comparable records began, a survey reveals.

However, confidence among Scottish businesses about the economic prospects facing them over the next 12 months, compared with the preceding year, is also the highest since the survey of members of the Institute of Chartered Accountants in England and Wales began in 2004.

The survey shows Scottish businesses expect the fastest rise in their input costs for more than a decade. Transport problems for companies have risen dramatically. And the survey signals growing concern over the tax burden, following hikes announced by the UK Government.

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ICAEW noted the survey indicated a 3.5 per cent rise in input prices for businesses in Scotland over the next year, which would be the joint-highest in the UK. It cited the effect of “rising demand domestically and internationally, higher energy and commodity prices, and disruptions to supply chains”.

Four in 10 Scottish companies reported staff turnover as an increasingly pressing issue. ICAEW declared the proportion reporting problems in hiring people for non-management roles as a growing issue had surged to 37% in the latest quarter, from just 4% in the final three months of 2020. It noted this was the highest rate seen in Scotland since its business confidence monitor began.

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ICAEW, noting its latest Scottish business confidence index of +42.2 was a survey high, added: “The high sentiment is a likely reflection of a recovery in sales over the past year [with] the easing of Covid restrictions, and expected further increases in the coming months.”

Businesses in Scotland saw their domestic sales rise by 2.8% year-on-year, while exports increased by 1.3%, the survey signals.

Domestic sales are forecast to rise by 5.6% in the year to the fourth quarter of 2022. And ICAEW observed that export growth is also projected to pick up, to 4.4%, which it declared was “a stronger outlook than the UK average”.

The survey found Scottish businesses plan to raise staff numbers by 2.6% in the coming year – the sharpest increase in three years. Average salaries are projected to rise by 2.5%, following what ICAEW described as “very limited growth during the pandemic”, as labour market conditions tighten.

Transport problems were cited as an increasing hindrance, with the 44% of Scottish businesses flagging this up nearly 10 percentage points on the previous survey record.

One-fifth of Scottish companies said the tax burden had become a growing issue. ICAEW said this was likely to reflect concerns around the UK Government's plans for higher corporation tax rates and the cost of increased national insurance contributions for the health and social care levy.