Businesses in Scotland remain ‘pessimistic’ on economy, survey finds – UK Times

Businesses in Scotland are often unprepared for net zero and are “pessimistic” about the economic outlook, a survey has suggested.

The quarterly Scottish Business Monitor from the Fraser of Allander Institute found companies also feel misunderstood by the Government.

More than 200 businesses from across Scotland were surveyed in the third quarter of 2025.

It found economic outlook has worsened, with four in five businesses expecting weak or very weak growth in the economy over the next 12 months.

Such an outlook was expressed by three-quarters of businesses in the second quarter of the year.

More than two-fifths of businesses reported no financial, operational or strategic preparations for net zero whatsoever.

Some 12% of businesses said the Scottish Government understands the business environment, a modest improvement on the same time last year.

Only 14% said they knew how to influence policy.

Joao Sousa, deputy director at the Fraser of Allander Institute, said: “Businesses are still relatively pessimistic about the economic outlook, with cost pressures remaining high and uncertainty surrounding the Chancellor’s upcoming Budget.

“Sales and employment data improved slightly, in a testament to business resilience.”

Josh Hampson, assistant economist at the institute, said: “The Scottish Government’s efforts to improve its relationship with businesses has returned some dividends.

“But a significant majority of our respondents still feel the Scottish Government does not understand the business environment, highlighting there’s still a way to go in changing this perception.”

A UK Government spokesperson said: “The UK Government has a mission to make Britain a clean energy superpower to bring growth, lower bills and good jobs as part of the Plan for Change.

“We have made the biggest-ever investments in offshore wind and carbon capture, to reignite our industrial heartlands.

“We are working closely with business to drive decarbonisation across the whole economy, including through our Net Zero Council.”

Deputy First Minister Kate Forbes said: “I am acutely aware of the challenges facing business – from ongoing global economic uncertainty to issues created by the UK Government, like Brexit and increases to employers’ national insurance contributions.

“I take heart that this survey indicates more businesses feel confident that the Scottish Government understands and is listening to these concerns.

“I am also encouraged that Scotland’s growth forecast has been upgraded by the Fraser of Allander Institute.

“This Government stands behind Scottish business and we will continue to work across sectors to maximise our economic strengths to drive growth, create jobs and put more money in people’s pockets.”