Despite ongoing economic challenges, Scottish businesses are showing signs of resilience and optimism.

In February, business optimism in Scotland surged to an 11-month high, with 42% of businesses expecting stable or improved performance in the coming months. This rise in confidence is attributed to a reduction in cost inflation which appears to have eased the financial pressures on businesses, resulting in 37% predicting an increase in business and only 6% expecting a decline.

These positive trends were mirrored across the UK, with 11 out of 12 regions recording higher outputs in March alongside notable increases in new work. This has fostered an atmosphere of assurance across all regions, with confidence levels in March above long-term averages.

However, amidst this optimism, there is a clear call from businesses for a simplified interface between them and government bodies. The aim is to better understand the support available, which could further bolster business operations and economic growth.

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Additionally, there is a significant demand for investments in skills and further education to propel economic development and meet the evolving demands of the marketplace.

On the consumer front, there has been a gradual increase in optimism. Despite consumer confidence still being in the negative range at -6.1, there has been an improvement over the past year as inflation has subsided and household finances have stabilized.

However, the lingering cost-of-living crisis continues to influence spending habits, with a considerable portion of Scots (67%) cutting back on non-essential purchases and reducing energy and leisure expenses (62%), with just under half of Scots scaling back their savings contributions (45%)

Scotland’s unemployment rate stands favourably at 4%, lower than the UK’s 4.2%, showing a decline over the past quarter. Despite this positive indicator, the economic inactivity rate remains a concern at 22.6%, slightly higher than the UK average, with long NHS waiting lists contributing to this issue.

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This has fed into public frustration with service delivery, particularly in healthcare, which has become a prominent concern, with 49% of Scots identifying healthcare and the NHS as their top concern, followed by the cost of living (41%), and issues related to poverty and inequality (20%). This sentiment has translated into a strong public demand for increased public spending, even if it necessitates higher taxes, a stance more prevalent in Scotland (36%) than in the rest of the UK (30%)

Despite some positive economic indicators, trust in the Scottish Government, while still the highest in the UK, has seen a decline across various metrics since 2022. This drop reflects broader concerns about the country's direction, with 58% of Scots believing the country is heading in the wrong direction, a sentiment that has worsened by 3% from the previous survey.

As Scotland navigates this complex economic and social landscape, the resilience in business and consumer sectors provides a glimmer of hope. However, the ongoing public concerns about service delivery and the cost of living underscore the need for more effective government policies and a strategic focus on education and skills development to secure a prosperous future.

John Walls is head of data analysis at s1jobs.