This optimism, despite a decline from +35% in February to +22% currently, surpasses the European level of +19%, albeit it is lower than the UK average of +40%.

Scottish firms are banking on increased investments, particularly in research and development (R&D), to counter high inflation and staffing expenses. Their inflation expectations remain high at +53%, though it marks a decline from the peak of +69% in June 2022, and a slight decrease from earlier in the year (+61%). Anticipated wage rises also contribute to the inflation concerns, with a net balance of +38% of businesses forecasting higher wages over the next 12 months, down from +44% in February.

The positive sentiment also reflects in the number of firms in Scotland predicting a net profit increase, standing at +20%, five points above the rest of the UK (+15%).

Plans for R&D spending have increased to +6%, up from 0% in February. Scottish firms, like their UK counterparts, display a growing interest in technology, particularly artificial intelligence (AI). The intent to invest in AI has seen a significant leap in the UK, from 18% of businesses in early 2022 to 29% in June, with service firms leading this trend in an effort to manage costs amidst increasing wages.

AI investment now ranks fourth in popularity, rising from seventh place last year, with more companies focusing on enhancing their capabilities in cloud technology (53%), cybersecurity (50%), and data analytics (46%).

David Caskie, joint managing director for Accenture in Scotland, said: “While it is understandable that Scottish businesses remain cautious in their general outlook during the current climate, there are still plenty of encouraging signs showing their resilience.

“Inflation and staffing costs remain a concern, but confidence to invest in research and development is bouncing back, particularly when it comes to technology and AI. We reported in April that Edinburgh’s status as a European capital for the data and AI sectors is on the rise, and these recent figures around R&D and AI indicate that we’re on a continued path to achieving this.”