Business confidence 'rises for first time in two years'

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Scottish business confidence has risen for the first time in almost two years, according to a survey.

The Federation of Small Businesses (FSB) found confidence improved slightly in the first quarter of 2017, but remained in negative territory.

That contrasted with the UK as a whole, where more firms were optimistic rather than pessimistic about their prospects.

More than 300 Scottish firms responded to the survey, which took place between 30 January and 17 February.

The study suggested that employment growth was flat for small businesses during the quarter.

While some companies expected an increase in staffing levels over the next three months, hiring intentions were still much lower in Scotland than the UK average.

The survey also suggested that revenues for Scottish small businesses declined during the quarter at the fastest rate for four years.

However, a majority of Scottish firms said they expected sales and turnover to grow over the course of this year.

The state of the domestic economy was highlighted as the largest barrier to growth by almost half of respondents.

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Four in 10 firms cited consumer demand as a brake on growth, while a quarter blamed skills shortages and an increasing number of firms raised concerns about rising costs for inputs, fuel and utilities.

FSB said the statistics suggested Scottish economic growth would remain below trend in the near future.

Andy Willox, FSB's Scottish policy convener, said: "Scottish business confidence couldn't fall much further at the end of 2016.

"A bounce at the start of this year is welcome, but looks like it will be tricky to sustain given that firms are reporting falling revenues.

"Too few Scottish businesses have faith that our economy is travelling in the right direction.

"The UK government needs to convince firms that their plans for Brexit will safeguard their interests.

"The Scottish government and our local councils also need to put local growth at the top of their agenda."