26 Mar 2026
Glasgow has emerged marginally ahead of Edinburgh and Aberdeen for confidence among small and medium-sized enterprises (SME), as fears for survival remain high across the country, according to new research from Aberdein Considine LLP.
The study, carried out by Censuswide in January on behalf of the legal firm as a follow-up to its 2025 SME Business Outlook survey, examined business resilience across Scotland in the run-up to the Holyrood election in May. It found that three quarters (75%) of SMEs in Greater Glasgow and Clyde see a risk to their viability - a significant proportion, but notably lower than in other major city regions - with 84% of SMEs in Edinburgh and the Lothians and 82% in Aberdeen and the North-east reporting concerns about their viability over the next 12 months.
Across Scotland, 81% of the total surveyed SME business owners share this concern, broadly unchanged from the 80% recorded in last year’s nationwide survey.
In addition to consistently high viability concerns, the proportion of Scottish SMEs feeling optimistic about their sector in the year ahead has fallen sharply, dropping from 83% last year to 50% in 2026.
Respondents pointed to several obstacles to business confidence, including more than a third (35%) of SMEs across Scotland seeing supply chain disruptions as their biggest financial challenge in the next 12 months, rising from 23% the previous year. Staff recruitment and retention costs were also noted as a significant cost pressure, with 33% identifying it as a major fiscal challenge, up from 19% in 2025.
Findings from the 2026 survey showed that rising operating costs were chief among the barriers to business growth over the next 12 months, with more than one-fifth (22%) of Scottish SMEs citing operational costs as their primary constraint. This is followed by concerns around skills gaps and workforce challenges and competitive pressure from other businesses, both at 17%.
However, with more than a third of businesses (37%) highlighting Scottish Government policy changes as their biggest growth challenge in 2025, this year’s survey shows a brighter outlook on the government, with four in five SMEs, including 75% of those in Greater Glasgow and Clyde, noting that the impact of the 2026 Scottish Budget will be positive for their business. When asked about the impact of the three-year 15% Retail, Hospitality and Leisure (RHL) rates relief for retail businesses with a rateable value of up to £100,000, 84% of respondents in Greater Glasgow and Clyde said it would have a positive effect.
While the majority of Scottish SMEs agreed that the Scottish and UK Governments prioritised their needs, at 66% and 65% respectively, this was not the sentiment expressed across the board, with one respondent from the retail sector claiming bureaucracy stands in the way of success, saying: “It's soul-destroying watching lifelong passion bleed out from red tape.”
When asked what the Scottish Government could do to improve conditions for SMEs, more than 40% of Greater Glasgow and Clyde SMEs called for policymakers to stimulate inward investment, followed by improving the availability of grant funding (30%) and loosening restrictive regulations (12%), sentiments which are mirrored across the country.
David Orr, Partner in Aberdein Considine’s Commercial Real Estate team, said: “Aberdein Considine’s 2026 SME Business Outlook survey, building on our research from last year, highlights the challenging landscape that small and medium-sized businesses continue to face. While concerns about viability remain high across the country, comparatively stronger levels of confidence are seen in Glasgow compared with the other major Scottish cities.”
In stark contrast to findings from 2025, the latest survey reveals that the proportion of Scottish SMEs planning to invest in ESG initiatives and sustainability has fallen significantly, dropping from 52% last year to 36% in 2026, signalling a shift in priorities as businesses grapple with rising cost pressures. However, the decline is less pronounced in Greater Glasgow and Clyde, where 45% of SMEs intend to invest in ESG over the next 12 months, compared with 33% in Edinburgh and the Lothians and just 20% in Aberdeen and the North-east.
Reflecting this stronger commitment, more than a fifth (22%) of Glasgow SMEs also identified the energy transition as a major opportunity - double the proportion in both Edinburgh and Aberdeen (11%), despite Aberdeen’s long-standing position as Europe’s energy capital.
Despite a majority of Glasgow area SMEs expressing doubts over viability, a sense of optimism seems to cut through as the highest ranked priorities for businesses in the region in the next 12 months were found to be investing in growth areas (40%), adopting new technologies (35%) and bolstering skills development for existing employees (34%).
Businesses in the area also highlighted digital adoption and implementing AI as key investment areas for 2026, with 40% of SMEs in Greater Glasgow and Clyde saying they intend to invest in these initiatives this year.
David added: “It is encouraging to see that, despite concerns around business viability remaining widespread, SMEs in Glasgow are still planning for growth, including expanding their operations, investing in their people and positioning themselves to seize new opportunities, which include the implementation of potential efficiencies through artificial intelligence. This reflects the resilience and ambition of the city’s business community and its vital role in driving economic activity across Scotland.
“The SMEs responding to this survey have been clear about what they need from government to succeed and grow and now, with only a short time until the election in May, the focus must be on ensuring their voices are heard.”
The full survey findings can be accessed here and the report can be downloaded here.
