The State of the Perthshire Economy

Part 1: Who’d be a Perthshire entrepreneur?

Rising cost bases, energy bills which have grown over 70% since the pandemic, lowering of National Insurance thresholds and punitive rates re-evaluations have all hit the entrepreneurial in Perthshire, and beyond, in recent times.

In this week’s Programme for Government, John Swinney said the Government would consider whether rates could be refined as a lever to reinvigorate flagging high streets.

Declining export values and poorer US sales have impacted the whisky industry

There are headwinds in whisky markets (there are 20 registered distilleries in Perthshire) and the region is at a crossroads over the introduction of a £4 a night Visitor levy.

As the region prepares to host its first ever Economic Summit on September 9th, what kind of business landscape will be delegates be looking over?

Here’s the numbers – and what they are suggesting.

Over 12 000 businesses operate across Perth and Kinross, the vast majority micro-enterprises or SMEs. With the exception of a handful of significant outliers, employing large numbers, small businesses strongly dominate the business environment.

This diversity is, in itself, a strength, with an embedded independent entrepreneurial culture but it can also signal fragility, if the big ‘buffer’ employers hit unexpected turbulence.

The number of businesses alone (5639 registered businesses and nearly 7000 non-limited companies) is evidence of a cemented business ecosystem.

Furthermore, post-pandemic changes in employment behaviour mean there will be significant numbers of independent freelances/sole traders operating beyond the clutches of the modelling tools which comb reports and accounts at Companies House.

In the most recent Growth Flag statistics for 2025/26, * 590 Perth and Kinross businesses were identified as ‘at risk’, with the wholesale and retail trade showing warning levels above that of the UK average. Given that this one of the region’s largest sectors (898 businesses), this is cause for some concern.

Retail businesses have faced tough trading conditions with rates continuing to beg questions

It is important to place this in context, however. Since 2025, there has been a 78% increase in UK companies showing distress signals, and there has been muted overall economic growth.

A mix of perceived anti-business measures, over several UK Chancellors’ Budgets, have impacted confidence and investment and the transition brought on by Brexit continues to offer uncertainty rather than assurance.

In Perth and Kinross, accommodation and food sectors continue to languish, at 3 percentage points below the national average – again a concern given the number of businesses operating in these segments.

Inflation and hiked production costs have clearly impacted food businesses, further trimming margins, with the 11.1% zenith of 2022 being the highest inflation headline for 41 years.

The accommodation sector, on the other hand, would point to policy change for a ‘transitionary’ outlook.

Licensing of short-term lets in October 2022 by the Scottish Parliament has changed the profile of the sector, with larger operators better equipped to assume greater admin and compliance burdens. As of December 2025, 32, 317 licences were in operation nationwide, according to Scottish Government.

For Perthshire, the question of whether licensing has increased or decreased letting supply overall is yet to be fully bottomed out but the number of applications continues to soar, especially in more rural, tourist-focused, locations.

According to Council figures, a 24% rise in short term lets was recorded in the Highland Perthshire housing market area to April 2026, the increase being recorded since October 2023.

There have been 63% rises in Eastern Perthshire and a 37% rise in Perth and Kinross overall.

This has leant itself to a wider problem for the Perthshire economy, the lack of housing for employees and locals – one of the biggest barriers to growth and a genuine challenge for the rural economy which makes up a significant 57.5% of the Perth and Kinross business mass.

Rural Perthshire in particular faces housing challenges for workers

PBN will deal with this issue, specifically, in a later special report on the state of rural Perthshire’s economy.

However, the issue of short-term let accommodation, worth £51.8m to local coffers, is worthy of further exploration and, perhaps, more time will be required to see the full impacts of licensing and the more localised measures of short-term let control areas, which have been contentious almost everywhere they have been introduced.

Avenues of possibility

These are some of the existing and emerging challenges for the region’s economy, as a whole, but one of its proven strengths is its potential.

There are, of course, differences between potential and actuality but there is tangible evidence that there is substance behind the headlines.

In January, Growth Flag’s outlook for business growth in 2026 scored Perth and Kinross the top region in the whole of Britain, for the second consecutive year.

Critics would likely ask questions over methodology, and, yes, there is some modelling involved around estimates, permed from available, verified data.

That said, even the most hardened sceptic would struggle to argue with the fact that the richest tranche of information stemmed from filed accounts and that 15% of those 3138 businesses had reported growth.

Its 2025 report, for Invest in Perth, highlighted that, in virtually all sectors, the region’s economy outperformed the UK average for potential.

Specific sub-areas of concern were identified, in the shape of Almond and Earn and Strathearn where potential was below average but, overall, risk was at 10.6% compared to 12.8% nationally and, importantly, the region had an 11% Growth score, 2 percentage points higher than the national baseline.

Hotel groups such as Strathmore Hotels Limited, owner of the Salutation in Perth, face an existential struggle but the region’s hotel sector is bucking trends.

Over 580 businesses achieved over 20% growth, with even the region’s hotel sector, which has shown signs of creaking both here and beyond, scoring a percentage point higher than the rest of the UK in terms of potential to grow.

Importantly, the economy is flexing and the Net Zero drive to decarbonise is one source of fresh growth possibility.

Illustrative design from a proposed development

While PBN’s pages frequently highlight proposed developments in solar and other energy, all of which must vie for community blessing, a significant number of larger energy players and agile new independents are clustering around Perthshire, which is well connected and, perceived or real, is seen as having access to a key resource... land.

Transforming that undoubted potential into real terms growth will be the challenge for economic summit delegates next week, local decision-makers and for Scottish Government which, on Tuesday, set economic growth at the heart of its strategy for the next 5 year Parliamentary term.

The overall outlook in the region is good. A strong programme of action now can help quicken the pace.

Scottish Government plans to introduce a Major Projects Office and will streamline planning processes to lure and facilitate business investment.

• Datasets include *Growth Flag reports 25/26, Biggar Economics, Perth and Kinross Council figures and Scottish Government/UK Government statistics.

• Caveat - Regional data represents the picture for the Perth and Kinross Council area as a whole, including Perth city, rather than, exclusively, Perthshire, as less data is available for this regional sub-set.