31 Aug 2018
Business confidence in Scotland remained steady at 17 per cent during August, according to the latest Business Barometer from Bank of Scotland.
Companies reported lower confidence in their own business prospects, which fell six points to 25 per cent, but saw a seven point increase in economic optimism to nine per cent.
Companies’ hiring intentions showed a net balance of six per cent of businesses in Scotland expect to hire more staff during the next year. However, this is down seven points on last month.
Across Scotland, a net balance of 19 per cent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, up one point on a month ago.
Across the UK, overall confidence fell seven points to 23 per cent as firms’ optimism about the economy dropped eight points to 17 per cent. Firms’ confidence in their own business prospects dropped five points to 29 per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Fraser Sime, regional director for Scotland at Bank of Scotland, said: “To see overall confidence holding firm demonstrates the continued resilience of Scottish businesses during uncertain times.
“In an evolving economic and political environment, firms should continue to seek trusted advice and optimise working capital. This will ensure they are well positioned to deal with potential challenges and capitalise on opportunities in order to maximise their full growth potential and play a part in helping Scotland prosper.”
UK regional picture
Businesses in London and the West Midlands showed the most confidence, both at 37 per cent, ahead of the North West (35 per cent).
Those in the South East were the least confident, with an overall confidence of just eight per cent, 15 points below the national average.
From a sector perspective, firms in the manufacturing sector remained most confident at 38 per cent, but confidence of construction businesses fell sharply by ‑12 points to 36 per cent, closely followed by consumer services (‑6 points to 22 per cent) and other services (‑6 points to 18 per cent).
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking commented: “Business confidence was resilient in the first half of the year, but has eased back recently. This reflects changes in perceptions of Brexit risks, which underscores the importance of current EU-UK negotiations.”