Business pessimism shrinks in Scotland and AI on the rise, survey shows

Business pessimism in Scotland has shrunk, according to a survey, which also found almost two thirds of respondents use artificial intelligence (AI).

The Fraser of Allander Institute’s Scottish Business Monitor spoke to 300 companies in June, finding the proportion of firms predicting very low growth over the next 12 months fell from 34% in the previous quarter to 27%.

However, almost all of those surveyed – 98% – said they were concerned by economic uncertainty, while 94% report concerns over political uncertainty.

The study was done against the backdrop of the final days of Sir Keir Starmer’s time in Downing Street and uncertainty over his successor Andy Burnham’s economic agenda.

The survey also found an increasing use of AI, with 64% of respondents saying they had implemented it.

About 94% said it was being used for everyday tasks, with three quarters saying specific tasks such as graphic design and branding was being covered by AI.

Across all sectors, the survey found, firms reported low or moderate use of AI.

Fraser of Allander director, Mairi Spowage, said: “The latest Scottish Business Monitor provides encouraging signs that business conditions are improving.

“Activity, employment and sentiment have all strengthened, and businesses have become less pessimistic about future growth.

“However, the survey also highlights a clear disconnect between improving conditions today and firms’ willingness to invest for the future.

“High levels of economic and political uncertainty continue to weigh on business decision-making, despite relatively few firms citing access to finance as a major challenge.

“At the same time, AI adoption is becoming increasingly widespread across Scotland’s economy.

“The key question is no longer whether businesses are using AI, but how deeply the technology can be integrated into business processes to support productivity and long-term growth.”