March 2018, there were an estimated 345,915 private sector businesses operating in Scotland. Between 2000 and 2018, the total number of businesses increased by an estimated 45.4% (108,020 businesses). As shown in the Chart 2 below, this increase over the long term has been driven by a rise in the number of unregistered businesses. Although there has been a considerable increase in the number of registered businesses over this period also – up 18.6% (27,630 businesses).
Chart 2: Estimated number of private sector enterprises operating in Scotland, 2000 to 2018
Between 2017 and 2018, the total number of private sector businesses in Scotland decreased by 8,830 businesses (-2.5%). This follows an increase in the previous annual period.
The decrease over the latest year was driven by a fall in the number of unregistered businesses. The number of unregistered businesses decreased from 178,340 in 2017 to 169,620 in 2018 – a decrease of 8,720 unregistered businesses (-4.9%).
The number of registered businesses (those registered for VAT and/or PAYE) decreased over the latest year also - down by 105 businesses (-0.1%) from 174,600 in 2017 to 176,295 in 2018 – this is the first fall in the registered business stock since 2011. However, the registered business count for 176,295 is still relatively high – it is the second highest point in the series back to 2000.
This slight fall in the registered business stock over the latest year was as a result of a decrease in the number of small (0 to 49 employees) registered businesses – down 0.1% (-190 businesses) between 2017 and 2018. Within this group, there was a decrease in the number of non-employing registered businesses (down 1,025 businesses) but an increase in the number of small employers (1 to 49 employees) from 101,245 in 2017 to 102,075 in 2018 (up 830 businesses).
The number of medium-sized (50 to 249 employees) businesses increased between 2017 and 2018 to 3,925 – representing an increase of 70 businesses. There has been an increase of 575 medium-sized businesses since 2000 and the 2018 medium-sized business count is a series high.
The number of large (250 or more employees) businesses also increased, over the latest year, to 2,380 – an increase of 15 since 2017. There has been an increase of 135 large businesses since 2000 and the 2018 large business count is a series high also. Following the recession, from mid-2008 to 2009, there was a slight shift in employment from large businesses (250+ employees) to small businesses – with large businesses accounting for 47.1% of private sector employment in 2010 compared to a low of 44.2% in 2015. The latest figures for 2018 show that the large business share of private sector employment has increased slightly over the latest year from 44.9% in 2017 to 45.1% in 2018.
The number of employers increased, between 2017 and 2018, from 107,465 to 108,830 – representing an increase of 915 employers (0.9%). This takes the number of private sector employers in Scotland to the highest level in the series (back to 2000).
Chart 3: Private sector employers operating in Scotland, 2000-2018