While many small and medium-sized businesses are experiencing rising costs, new research from Clydesdale Bank says it is doing little to dampen their growth aspirations.

A new survey by the bank conducted among 750 SME decision makers found that the majority are rolling out expansion plans as faith in the economy grows.

Clydesdale Bank says that costs have risen for 65% of SMEs over the last year, with raw materials, staff salaries and utility and energy costs causing the most concern.

It was also found that the perception of rising costs was most notable in the manufacturing, food and drink, hospitality and legal sectors.

However, two-thirds are expecting to invest in their business over the next 12 months – with new equipment, premises and staff the highest priorities. 33% believe their turnover will grow by an average of 11% in the year ahead, while a further 48% predict it will stay stable.

Alastair Christmas, regional director for Business and Private Banking at Clydesdale Bank in Scotland, said: “Despite rising costs, Scotland’s small and medium-sized businesses are demonstrating they have the financial flexibility to weather leaner periods and now have the appetite to grow.

“We’ve spoken to hundreds of small businesses up and down the country and found many are working hard to protect themselves from these rising costs, but also extremely confident about the current state and future direction of our economy.

“Through our bespoke lending initiatives we’re providing the flexibility they’re looking for to enable them to invest and expand where they see opportunities, whether that’s to create more jobs, purchase premises or enter new markets.

“As a result, we are seeing small businesses innovating, creating new jobs and laying down foundations for the future.”

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