Friday July 17th 2026
FSB Scotland Chair, Guy Hinks
Written by Midlothian View Reporter, Liam Eunson
Scottish small businesses are feeling more confident now than at the start of the year, new data from the Federation of Small Businesses (FSB) shows.
The latest FSB Small Business Index (SBI) for Q2, 2026 finds an overall confidence rating of -32.11. While still in decisively negative territory, this is an improvement on the previous quarter’s rating of -63.64. The Q2, 2026 SBI rating for the UK overall is -57.36.
Increasing business costs remain the key driver of low confidence among Scottish small businesses, with 90% indicating further increases in the last three months. Fuel (57%) and utilities (53%) continue to be the largest sources of costs for small businesses in Scotland, followed by staffing (48%) and taxation (44%).
Growth expectations remain muted, with an equal number of businesses (25%) expecting to grow as to contract over the course of the next year. 61% of Scottish small businesses identified the domestic economy as their greatest barrier to achieving growth.
Guy Hinks, FSB Scotland Chair, said: “While confidence levels remain low among Scottish small businesses, it’s nevertheless welcome to see some signs of improvement in these latest figures.
“We’re still some way from confidence levels achieving a positive rating, however. While small businesses are by their very nature optimists, it’s no surprise that confidence continues to be low in the face of ongoing cost pressures and taxation burden.
“The new Scottish Government’s commitment to a review of the anomalies thrown up by the most recent non-domestic rates revaluation is a promising first step. The wider review of the rates system is also an opportunity to deliver a quick shot in the arm to the Scottish economy and the small businesses which drive it.
“Post-summer recess, Ministers must build on these early commitments by delivering a Programme for Government that is pro-growth and puts small businesses first. Small firms are the only engine of growth present in each and every postcode and we need them firing on all cylinders”.
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