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Rising Energy Costs Threaten Business Growth According To New Research

Rising energy costs threaten business growth according to new research

One in five businesses expect to reduce operations this year as a result in the increase in energy prices according to the Addleshaw Goddard Scottish Business Monitor report, produced in partnership with the University of Strathclyde’s Fraser of Allander Institute (FoAI),

The quarterly survey examined business sentiment, outlook and expectations during the fourth quarter of 2021.

More than 80% of businesses said that they were struggling to recruit staff and a quarter said they were finding it challenging to retain their existing staff.

The report also highlighted that while most businesses are committed to supporting the Scottish Government’s Net-Zero ambition, 91% of businesses highlighted the high costs associated with improving sustainability were a barrier and 84% said that they needed to prioritise recovery.  Two-thirds highlited lack of government funding as a key issue.

Mairi Spowage, director of the FoAI, said: “These results show us that despite the reintroduction of some restrictions over the Christmas period, business optimism remained throughout the final quarter of 2021.

“However, inflationary pressures and rising energy prices are a concern for firms. Growing uncertainty throughout global supply chains is also causing problems for businesses across all sectors, particularly those in industries such as manufacturing.

“Difficulties for firms in hiring new staff also persist, with some firms expressing challenges in their ability to retain existing staff levels.

“However, it is positive to see the lasting effects that COP26 has had on business attitudes, with the majority continuing to signal their commitment to reaching their net-zero targets.”

You can read the report in full here.

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