Despite the positive trends, businesses are bracing themselves for challenges ahead.

This month, ONS surveys found that 8.8% of Scottish businesses owners said taxation was their main concern for their business, compared with 2.4% this time a year ago.

This follows UK Chancellor Rachel Reeves’ announcement of an increase in National Insurance for businesses.

From the start of the next financial year, beginning in April, employers will pay 15% National Insurance on workers’ wages, up from the 13.8% now.

Research by the Federation of Small Businesses (FSB) found that confidence among small businesses in Scotland was “at its lowest level since the height of the pandemic during the final quarter of 2024”.

“So many of the pressing issues facing small business owners right now come down to cost and cashflow,” said Andrew McRae, FSB Scotland policy chair.

The FSB also found that eight out of 10 small firms in Scotland experienced rising costs, with most citing the cost of utilities (62%) and labour (53%) as the biggest cause of the increase.