In December last year, shortly after the Autumn Budget announcement, 77% of businesses said they planned to reduce or freeze hiring in the next six months - that figure has now increased to 85%.

Additionally, more businesses have now formed plans to pass these rising employment costs on to customers (up to 81% from 67% in December). Employees of mid-market businesses are also more likely to be impacted by business leaders’ plans to offer reduced or no pay increases and bonuses, as well as reviewing their employee benefits offering.

Despite these challenging decisions, the research, which offers a rolling indicator of mid-market business sentiment, shows a remarkable surge in optimism throughout Scotland’s business community. A striking 93% of mid-sized firms in Scotland express optimism about their revenue growth prospects over the next half-year, up from 72% in December 2024.

The research highlights that Scotland’s business ecosystem is demonstrating remarkable resilience, with over 87% of business leaders expecting profit increases over the next six months, up from 46% in December 2024.

By contrast, larger corporates across the UK are now less optimistic about both their own fortunes and those of the wider UK economy, as the Business Outlook Tracker recorded a drop in confidence from the 200 larger businesses also surveyed:

• -10pp decrease in their optimism about the outlook of the UK economy
• -3pp decrease in their optimism about their funding position and their revenue growth
• -2pp decrease in those expecting their profits to increase

Stuart Preston, Practice Leader and Head of Restructuring for Grant Thornton UK LLP in Scotland, said: “Beyond the numbers, what we’re seeing across Scotland is the remarkable adaptability that makes our region such a vibrant business hub. Local business leaders are making tough but necessary decisions today that will protect their growth trajectory tomorrow.

“Scotland’s diverse economic landscape, from manufacturing and energy to tourism and services, gives our mid-sized firms a distinct advantage in terms of agility compared to larger corporations that may be more exposed to international volatility. Many companies in Scotland have already weathered challenging economic conditions and are now emerging stronger and more confident about future prospects.

“This positive sentiment isn’t just reflected in spreadsheets – it’s evident in conversations we’re having with business leaders across Scotland who are actively investing in their future despite cost pressures. As we approach the Spring Statement, Scotland’s businesses will be watching closely, but the practical, can-do attitude demonstrated by our region’s mid-market suggests they’re well-positioned to navigate whatever challenges lie ahead.”