More than seven out of ten businesses in the south of Scotland say their performance is good or steady, according to the latest major survey of the region. Despite rising costs and recruitment headaches, firms are pushing forward with ambition and hiring plans that show real grit.
The South of Scotland Business Survey, carried out by Ipsos for South of Scotland Enterprise (SOSE), gathered views from 600 companies in Dumfries and Galloway and the Scottish Borders between October and December 2024. The results paint a picture of a region that refuses to be knocked off course.
Firms Stay Resilient as Sales Hold Firm
Seventy-one per cent of businesses reported that turnover either grew or stayed the same in the second half of 2024. Thirty-five per cent saw actual increases while 36 per cent kept things level.
Profit margins told a similar story. Sixty-one per cent said margins improved or remained stable, though more than a third admitted they took a hit.
Jane Morrison-Ross, chief executive of SOSE, welcomed the findings.
“Businesses and social enterprises across the south of Scotland remain ambitious, resilient and firmly focused on growth, even in the face of a challenging economic climate,” she said.
She pointed out that 46 per cent of firms are actively chasing expansion, up from the previous survey.
Staffing Problems Top the Worry List
Workforce issues dominate the concerns.
Two-thirds of respondents flagged labour costs or recruitment difficulties as major barriers. Almost one in four businesses say they do not have enough staff right now.
Among those who tried to hire in the past year:
- 57 per cent took on graduates
- 19 per cent brought in apprentices
- 31 per cent struggled most to find skilled tradespeople
- 28 per cent could not fill general labour roles
When skills gaps appear, 81 per cent of affected firms simply pile extra work on existing teams.
Adam O’Sullivan, SOSE lead analyst for economic insights, called the survey “an important temperature check”.
He thanked the 600 businesses that responded and stressed that the panel helps shape future support.
Costs Bite Hard but Demand Drives Winners
For the 31 per cent of firms performing strongly, the main reasons were straightforward:
- Increased customer demand (66 per cent)
- Better efficiency (37 per cent)
- Cost-cutting measures (26 per cent)
On the flip side, the 28 per cent that admitted they were struggling pointed to:
- High operating costs (80 per cent)
- Falling demand (59 per cent)
- Red tape and regulations (37 per cent)
Energy prices, raw materials and National Insurance hikes all featured heavily in open comments.
Confidence in Wider Economy Remains Shaky
Only 35 per cent of south of Scotland business owners feel confident about the Scottish economy over the next 12 months. More than half say their confidence has dropped in the past six months.
Yet when asked about their own prospects, the mood brightens. Most expect to maintain or grow headcount, and many plan investment in training, equipment or premises.
In 2024/25 SOSE approved £10.3 million for 558 projects, the highest number on record.
A Region Choosing Its Own Path
The south of Scotland is not waiting for national headlines to improve. Companies here are hiring young talent, controlling what they can control, and leaning on local agencies for practical help.
The message from factory floors, shops, farms and offices across the Borders and Dumfries and Galloway is clear: tough times are real, but so is the determination to come through them stronger.
These businesses are not just surviving. They are building the foundations for the next generation of jobs and opportunities in a part of the country that often gets overlooked.
What do you think? Are the south of Scotland firms right to feel cautiously optimistic, or are the headwinds still too strong? Drop your thoughts in the comments below.
