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2024 Outlook: Scotland
Staying sharp for the year ahead.
See the big picture
Scottish businesses are in a good place – many have preserved capital over the last few years, which means they’re going into the new year with cash-strong balance sheets. We expect corporate confidence to pick up in 2024, along with business investment and growth.
Head of Scotland, Barclays Corporate Banking
Investing in growth
With inflation starting to come down and interest rates seemingly levelling off, 2024 looks set to be an interesting time for Scottish businesses. For many, the past 12 months saw a relentless focus on driving efficiencies to protect margins and conserve costs. Now, as things start to settle and some certainty returns to the market, we expect to see increased investment in products, people and technology - and businesses starting to look outward again for opportunities to diversify and grow.
That said, we’re not fully out of the woods just yet, and much will of course depend on how consumer sentiment and confidence pan out. With the current energy price cap coming to an end in March and potential mortgage rate increases at various points in the year when consumers come off historic deals, understanding how consumers might react to these pressure points – and the resulting impact on the Scottish economy – is key.
Revving up renewables
Scotland's abundance of renewable resources will continue to present considerable opportunities for businesses in supporting the transition to net zero. Our vibrant renewable energy industry is growing rapidly, and the redeployment of engineering skills from the manufacturing sector is helping Scotland to retain its position as a world leader in this arena. I expect 2024 to present some big opportunities, particularly for organisations able to capitalise on the associated on the manufacturing and supply chains benefits onshore.
The green ports initiative should also help drive further investment and growth throughout the year and beyond. For instance, based on its recent net zero strategy announcement Forth Ports is set to become a key player in the offshore supply chain. Meanwhile, Glasgow hosting the All-Energy Conference – one of the UK’s largest sustainability conferences – presents a great opportunity for Scottish businesses to network and share knowledge and experience with organisations from across the UK’s renewable and green energy sector.
With 40 countries holding general elections in 2024, it’s set to be another year fraught with geo-political uncertainty. It will also be interesting to see how global climate-related targets and the transition to net zero are impacted.
Head of Scotland, Barclays Corporate Banking
Capitalising on M&A
As corporate confidence picks up, so should investment and M&A activity, and I think we should see closer alignment of buyer and seller valuations. Given the dry powder on hand, private equity activity is also set to pick up across Scotland in 2024, and trade deals should also increase as businesses capitalise on the opportunities presented by a changing market.
The hospitality and leisure sector, in particular, is expected to experience strong growth in the year ahead. Strong hotel performance is driving development, and Scotland’s cities, countryside and various attractions – combined with its reputation as a safe, relatively good-value-for-money destination – are bringing more and more visitors to our shores every year.
Key takeaways
Look to diversify
Now may be a good time for businesses to scan for potential over-dependencies and manage the risk profile across their value chains. Diversifying your supplier base and income streams could be a key success factor in 2024.
Strengthen your management structure
Ensuring the right management team and board structure are in place will reduce the chance of unexpected business difficulties and help an organisation to go from strength to strength.
Be super-vigilant on fraud
With cybercrime and fraudulent activity on the rise, the chances of suffering the devastating consequences are increasing every year. Investing in awareness and skills and putting the necessary systems in place to protect an organisation should be a top priority.
Keeping fraud front of mind
Fraudsters are as active as ever, impersonating our colleagues and attempting to defraud our clients. To help protect keep you and your business we have a wealth of resources available. You one step ahead, view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.
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