IT’S BEEN a successful year for Scottish rural business, as revealed by an extensive report by the Scottish Government and Scottish enterprise, highlighting an upbeat year for the majority of businesses, despite a number of challenges.

Scotland’s Rural College carried out the research of over 1200 businesses and found that nearly three-quarters of rural businesses in Scotland reported good operating environments in 2018 despite issues such as staff recruitment and retention issues, Brexit uncertainty and poor digital connectivity.

The rural report also showed that only 3% of businesses rated their operating environment as ‘poor’ or ‘very poor’, in contrast to 47% who said ‘good’ and 27% claiming ‘very good’.

Scotland’s rural businesses make a substantial contribution to the national economy. There were an estimated 49,000 registered businesses in rural Scotland in 2018, employing 285,000 people and generating £36 billion turnover.

Senior Agricultural Economist at SRUC and lead author of the report, Steven Thomson, reflected on the findings: “This research is providing valuable insights into the nature of Scotland’s rural businesses – their structure, confidence and challenges – alongside improving our understanding about connections with the land-based sector.

“There is an extremely wide variety of business scales and types operating in Scotland’s rural areas and small towns, and we have found common challenges being reported by many, particularly regarding recruitment, digital connectivity and cashflow,” he explained.

“For some businesses, Brexit-related uncertainty has become a particular challenge and unfavourable exchange rates are negatively impacting on those sourcing supplies from abroad.”

Cabinet secretary for the Rural Economy, Fergus Ewing, welcomed the results but urged caution in the months ahead: “While it is positive to see that the majority of rural businesses in Scotland have reported a good operating environment last year, this research provides a valuable insight into our rural economies structure, confidence and concerns.

“That is why, earlier this year I announced the establishment of the new Rural Skills Action Plan and the Rural Economy Action Group to ensure rural policy is mainstreamed and that it continues to grow as a vibrant, sustainable and inclusive economy,” he continued.

Mr Ewing encouraged rural businesses to take precautionary measures to prepare for Brexit: “Recognising the concerns of rural businesses around Brexit as we edge ever closer to leaving the EU with no deal in place, there has never been a more important time for rural businesses to take the necessary steps to ensure that they are as prepared as possible for whatever Brexit outcome may be delivered.”

The survey also demonstrated that the country’s wider rural business population faced a similar challenge to the agricultural industry in terms of an ageing workforce, with 72% of those interviewed being over 50 and only 9% under 40.

Head of Rural at Scottish Enterprise, Julian Pace, added: “This survey will help us assess the potential impacts of changes to agricultural incomes on non-agricultural businesses and the findings will inform discussions between Scottish Enterprise and partners on support for rural areas and businesses.

“Additionally, this report provides the basis for further analysis on women in business, constraints on business growth and exporting for the rural business community,” he concluded.