Understanding Business- June 2025

The latest findings from the Understanding Business survey offer insights into how Scottish businesses are faring during ever-changing economic times.

This wave witnesses noteworthy shifts from March – most prominently, a rise in optimism across a range of business and economic aspects. Pessimism remains for a plurality of respondents when considering the currrent and future condition of economic affairs in Scotland; however, negative sentiments appear to be slowing giving way.

Similarly, this wave sees a sharp improvement in business confidence when it comes to both profit and turnover – record high levels of optimism are captured when businesses discuss their financial expectations over the next year.

Despite this, worries persist among Scottish businesses about issues like taxation and inflation. Despite a decrease in the proportion of respondents who report being more concerned than they were twelve months ago, the majority of all businesses surveyed remain increasingly concerned about both issues. Concern with business rates, exchange rates and competition are also on the rise.

And despite concerns about a tight labour market, more Scottish businesses are reporting workforce growth, suggesting strong appetite for skilled labour. However, the skill of applicants remains a critical challenge.

Perhaps in response to this challenge, most businesses view migration as an answer to critical skill shortages in Scotland. Many are open to increased devolution of worker migration to Holyrood. Yet, some businesses remain wary of the impact migration has on local workforces, and the integration of devolution of migration on UK-wide immigration laws.

Considering governments in both London and Edinburgh, businesses are moderately more satisfied with each government’s sensitivity and actions to address business concerns in recent months.

Overall, this wave indicates increasing confidence in the economy despite recent turbulence and underscores the rapidly shifting landscape of Scottish business.

You can read the full report here: Understanding Business- Wave 9- June 2025.