Final Quarter of 2026 Sees the First Rise in Scottish Small Business Growth Forecasts This Year

The final months of 2026 see a rise in the percentage of Scottish small businesses that forecast growth for the next three months – 25%, a significant rise on 15% this time last year and the first modest rise in growth forecasts for 2026 as a whole – according to new research from Novuna Business Finance.

Despite signs of a modest rally compared to earlier this year, the percentage of Scottish small businesses forecasting growth during 2026 remains significantly down on the second half of 2024 and the early months of 2025.

Percentage of Scottish small businesses predicting growth for the quarter ahead 

These new findings, for the period October to December 2026, come at a time of economic volatility, with the average price of diesel rising above £2 a litre for the first time[1] and growing concern over the impact of government borrowing on inflation and interest rates[2]. Add to this, many Scottish small businesses are also worried about what could be announced in the Budget later this month – with the new Novuna Business Finance poll revealing that 48% of Scottish small businesses said further hikes to National Insurance would negatively impact the growth outlook and finances of their business – with 35% also worried about the impact of potential rises in Corporation Tax.

The Business Barometer study from Novuna Business Finance has tracked small business growth forecasts every quarter since 2014. Whilst quarter-on-quarter changes in growth outlook are often gradual, the trends over time paint a concerning picture of decline. For 2026, the average small business growth figure for Scotland over the four quarters of the year was 23%. This is down on the annual average for 2025 (26%) and 2024 (31%).

Regional highlights: Contrasting fortunes for the two Number 10s

The percentage of Scottish small businesses predicting growth for the final three months of 2026 (25%) is on par with the position in Wales (26%), but trails a number of English regions, where a higher percentage of small businesses predicted growth. These regions included; London (32%), The West Midlands (31%), The North West (29%) and East Midlands (29%).

Sector highlights

Nationally, comparing growth forecasts between the start and end of 2026, in seven sectors there were falls in the percentage of small businesses predicting growth – with sharp falls in agriculture property, medical and legal services – whereas there were annual rises in transport, IT/telecoms, education and leisure/hospitality.

Set against growth forecasts in the manufacturing and construction sectors remaining flat for the year, the transport and distribution sector saw an annual rise in small business growth forecasts. This rise could be delicate given the challenging context of rising costs, with 62% of small businesses telling Novuna Business Finance that any further tax rises for petrol or diesel vehicles would negatively impact their growth plans.

With the Christmas trading period ahead, small business growth outlook in the retail sector (27%) was up on last quarter (21%) but was down overall on the start of the year (32%) – a sector whose small business growth outlook has been volatile since the Covid lockdown era and the cost-of-living crisis.

Percentage of small businesses predicting growth by industry sector: 

Comparisons between the start and end of 2026

Jo Morris, Head of Insight at Novuna Business Finance comments: “From our latest data, it is good to see an improvement in small business growth forecasts in Scotland. While the end-of-year rally is modest, the overall position remains some way behind the growth forecasts seen in 2024 and early 2025.

“Our quarterly research this year shows that many small businesses are working hard to absorb the pressures of rising fuel and energy costs. Many are also concerned about how further tax, inflation and interest rate changes could impact their growth plans. At the same time, the majority of smaller businesses have not yet fully worked through whether and how AI could practically help business growth.

Despite all the headwinds, what we have seen since the Covid era and the cost-of-living crisis is that small business owners are resilient. They dislike uncertainty, but they find ways to adapt, innovate and pursue growth. Looking ahead to 2027, the UK’s growth ambitions depend heavily on their success. The autumn and winter months are an important time to step up and back UK small businesses. At Novuna Business Finance, we continue to support established businesses by helping them invest in essential assets, preserve cash flow and ease pressure on other areas of their budget.”