Welcome to our regular monthly collection of news and announcements that impact Scottish accountants and their clients.
As we enter Autumn you’ll continue to be busy on their behalf – which is why we created our accountants hub in the first place so you’ll have access to the most important and accurate insolvency information whenever you need it.
But you can’t read everything and be everywhere at once, so we collect the most interesting and important business and insolvency news stories every month along with new blogs on a range of topics each and every week.
We’re always keen to hear what you think so email us at ask@businessrescueexpert.co.uk because we really want to write what you want to read!
2024 – an annual review of the Scottish Economy
Over the past 12 months Scotland’s economy showed a gradual recovery alongside more persistent challenges.
Several key economic indicators have shown improvements with GDP growth gaining modest momentum and inflation finally falling below its target rate of 2%.
Overall economic growth has largely been driven by the performance of the services sector which has grown by 1.3% annually in the second quarter of the year.
Services comprise 80% of Scotland’s economic output and have played a vital role in supporting GDP especially across the retail, financial and professional services sectors.
Unfortunately this balanced against the disappointing performance of the production and manufacturing sector which has contracted by 0.1% and construction which has declined by 1% – although several SMEs in the building sector have reported a strong rise in new projects since March which suggests potential for further future recovery.
Lower inflation has helped to improve Scottish consumer sentiment with household confidence gradually improving and is mirrored by Scottish businesses in the third quarter too.
85% remain wary of economic uncertainty but many still have moderate growth expectations. The number of businesses predicting “very weak” growth has decreased significantly since the start of the year, employment levels have improved and there has been a steady reduction in operating costs as inflation has eased.
Capital investment sentiment is still slightly negative at -1.4 but this has improved significantly from the -13.5 that was at the end of the year.
One of the stickier issues for Scottish firms remains labour shortages, especially in the manufacturing, construction and hospitality sectors. Although this has eased slightly on the levels of 2023, around 26% of businesses are still reporting difficulties in filling positions.
Ironically, the UK-wide job market is showing signs of cooling. According to the latest statistics from the Office for National Statistics (ONS) for the three months to September, they have risen to 4.3% from 4% in the previous quarter.
The ONS advises caution in relying entirely on these figures due to data collection issues although other indicators also indicate a slowdown. The number of employees on company payrolls fell by 9,000 over the quarter with job vacancies falling for the 28th consecutive month, reaching their lowest levels since May 2021.
Scotland’s unemployment rate remains low at 3.3%, reflecting a more robust labour market when compared to the broader UK.
Despite the promising economic data, Scotland continues to face enduring social challenges including inequality.
There are notable disparities in quality-of-life indicators based on income, age and disability status with there being a 13-point difference in wellbeing scores between those earning up to £27,000 and higher income earners.
Overall Scotland’s economy has a stable foundation for growth in 2025, bolstered by improvement in inflation, consumer confidence and service sector performance.
Nevertheless, sectoral disparities, recruitment challenges and social inequalities underline the need for targeted policy measures to ensure that economic growth is inclusive and sustainable.
Scottish Insolvencies up 10% in last quarter
The latest Scottish corporate insolvency statistics show that the recent financial pressures facing businesses in the country continue to be exacerbated by inflation and changing consumer behaviours.
In the second quarter of 2024/25 (Jul to Sep) there were a total of 313 corporate insolvencies including liquidations which is an increase on the previous three months of 10.6%.
Iain Fraser, Chair of the Scottish Technical Committee at R3 said: “Despite the increase in corporate insolvencies, Scotland’s economy has shown some resilience of late, with the most recent figures showing a GDP growth of 0.3% in July 2024.
“This growth has mainly been driven by the manufacturing sector and information and communication services, along with a boost in consumer spending from major summer events such as the Euros and the Fringe Festival.
“Inflation has dropped considerably to 1.7% and this feels a world away from the eye-wateringly high figures we were grappling with one and two years ago.
“With unemployment in Scotland falling below the UK average, interest rates falling and inflation easing, there are reasons to be optimistic.
“Whilst Scotland’s economy has shown resilience, it would seem Scotland’s economic upturn has come too late for a number of businesses as the increase in Creditors’ Voluntary Liquidations has driven corporate insolvency levels in Scotland to their highest levels since Q4 22/23.
“From a solvent perspective, Members’ Voluntary Liquidations (MVLs) have also increased to their highest figures since Q1 23/24 and this suggests there has been a rise in the number of solvent businesses shutting.
“This is perhaps due to director fatigue after four years of economic turbulence and the effect this has on the business climate or directors taking action to reorganise their businesses ahead of any tax changes in the Budget.”
You can also find a summary of the other important and interesting news stories for Accountants this month right here.