Understanding Business- March 2025

The latest findings from the Understanding Business survey offer a clear and timely snapshot of the challenges and shifting sentiments facing Scottish businesses in 2025.

This wave reveals a growing sense of economic unease, with confidence in the year ahead falling sharply. More businesses now expect conditions to deteriorate over the next 12 months. This rising pessimism reflects mounting concerns over economic stability, with businesses increasingly uncertain about their future prospects.

Related to this increase in pessimism, financial expectations have also weakened. Fewer businesses anticipate growth in turnover or profitability, while more expect these to decrease.

Many are bracing for tougher times, reflecting the mounting financial pressures they face, from rising costs to ongoing trade challenges.

The report also highlights concerns with tariffs with many believing they will have a negative impact on Scottish businesses. This underscores the difficulties of cross-border trade during uncertain times.

Politically, the survey reveals a shifting landscape. The SNP remains the party most trusted by Scottish businesses, albeit narrowly. Scottish Labour is close behind, while Reform UK—new to the survey—has quickly made its presence felt. When it comes to policies for growth and investment, the SNP leads and support for
Labour has slipped significantly over the last 12 months during which time the party took the reins at Westminster.

Sentiment towards government shows a clear divide. While businesses continue to believe the Scottish Government is concerned with their needs, there are signs
of a modest improvement in how they view the UK Government.

Overall, this wave paints a picture of a business community increasingly wary of the economic outlook for the coming year and readying for tougher times. Business will be keen to hear what parties have to offer as the race for Holyrood 2026 begins in earnest.

You can read the full report here: Understanding Business- Wave 8- March 2025.