Scottish SMEs lead the UK in expansion plans

However, the survey also found that costs have risen for 65 per cent of SMEs over the last year, with raw materials, staff salaries and utility and energy costs causing the most concern.

Two thirds are expecting to invest in their business over the next 12 months — with new equipment, premises and staff the highest priorities. Meanwhile, 33 per cent believe that their turnover will grow by an average of 11 per cent in the year ahead, while a further 48 per cent predict that it will stay stable.

Alastair Christmas, regional director for Business and Private Banking at Clydesdale Bank in Scotland, that commissioned the survey said: “Despite rising costs, Scotland’s small and medium-size businesses are demonstrating that they have the financial flexibility to weather leaner periods and now have the appetite to grow.

“We’ve spoken to hundreds of small businesses up and down the country and found that many of them are working hard to protect themselves from these rising costs but are also extremely confident about the current state and future direction of the economy.