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DAVID RICHARDSON: Depressing outlook in terms of business confidence, with an uncertain future ahead for Highlands

By David Richardson

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David Richardson, regional development manager at FSB.
David Richardson, regional development manager at FSB.

The FSB’s latest quarterly Scottish Business Confidence Index makes depressing reading: confidence is at its lowest since the end of 2020. Nine in 10 small businesses have seen costs rise, especially fuel and utilities, while two in five said difficulty recruiting skilled staff was a major barrier to growth, second only to concerns about the domestic economy. The result? Three in five Scottish businesses were running below capacity.

But what about the Highlands and our all-important visitor economy? Following numerous phone conversations with tourism and hospitality businesses across the region it is clear the large influx of first-time visitors that we saw during the pandemic, people who came here only because they could go nowhere else, has ended, to be replaced in part by very welcome high-spending overseas visitors. It’s also quieter overall, with some parts being much busier than others.

Many in the easily accessible Inverness/Loch Ness area are thriving, though staff shortages are hampering some. However, the further west and north one goes the quieter, relatively, it becomes. For while the year started well and the Queen’s Platinum Jubilee weekend was hectic, businesses in more distant parts frequently experienced a lull afterwards. And while things have generally picked up since the start of the English school holidays, it’s still quieter than many would like. Indeed, some FSB members struggling two months ago to recruit staff, now find themselves struggling to find enough work for them to do.

So, what of 2023? Might poor experiences at airports and with airlines this year lead to another surge in staycations next year? Conversely, if cost is discouraging visitors from heading to remoter Highland parts and reducing the discretionary spend of those that do go now, then what impact will rising inflation, probable recession and massive energy price hikes have on holiday-taking next year?

At the end of the day, beleaguered Highland businesses facing weak demand, skills shortages and massive cost increases will strive to do what they always do – provide their customers with fantastic experiences.

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