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Season of hope is tempered by costs, debts and uncertainty of war

By David Richardson

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Business Comment by David Richardson, regional development manager, Federation of Small Businesses

David Richardson, regional development manager at FSB.
David Richardson, regional development manager at FSB.

Spring is just around the corner, by Monday all remaining statutory Covid restrictions will have been lifted, bar face masks, and the British economy picked up faster than anticipated in January.

By rights, we should all be looking forward to the annual northward migration of our visitors and, hopefully, to local economies getting back to the way they were pre-Covid.

But all is not right – far from it.

Many of the problems of the past have not gone away. Both the shortage of staff and the costs of doing business increased last year, and when added to debts built up during Covid, it is no surprise that three in 10 Highlands and Islands businesses in our FSB Scotland December survey were pessimistic about their chances in 2022. And then President Putin invaded Ukraine and everything became a whole lot worse.

War in Europe has forced the world into unknown territory, and governments, banks and economists are agonising over how best to react to ever-changing events.

So how are we being affected in the Highlands? The rapidly increasing cost of fuel and other goods and services is plain to see, and it’s affecting everyone, not just businesses’ bottom lines.

Everyone will have to budget extremely carefully for the foreseeable future, but just how carefully, and how will consumer spending patterns change? What impact will all this have on Highland tourism? Will people be frightened to travel, especially high-spending international travellers, and what of staycations?

And above all, what will Putin do next and where will it all end? Questions, questions, questions, to which we have few, if any, answers.

The world is uncertain at the best of times, but businesses, who crave certainty for obvious reasons, have had more than their fair share of it lately: Brexit, Covid, and now war.

How things pan out remains to be seen, but what matters is that we all – residents, businesses, governments and public agencies – do what we always do when times are hard and support our local businesses. It’s in all of our interests to keep the beating hearts of our communities pumping.

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