Business Confidence in Scotland Rises

Scottish businesses are returning to “cautious optimism” as confidence rises, according to a new report. Confidence in Scotland rose 17 points during February to reach 35%, the latest Business Barometer from Bank of Scotland Commercial Banking found.

The report also discovered that companies’ hiring intentions also rose. A net balance of 27% of businesses in Scotland now expect to hire more staff during the next year, up 23 points on last month, BBC reported.

Across the UK, overall confidence fell two points to 33%, driven mainly by a fall in firms’ confidence in their own business prospects, the report found.

Fraser Sime, regional director at the Bank of Scotland Commercial Banking, said: “It’s encouraging to see confidence rise among Scottish businesses, but one positive month doesn’t reflect the entire picture seen across the country. While notably higher than in January, firms’ overall confidence and their hiring intentions are now only in line with the average across the UK.

“As such, these figures reflect a return to cautious optimism for Scottish businesses, which is understandable given the economic uncertainty they still face.”

Economic optimism in Scotland rose to 33% in February (up 20 points from 13% the previous month), while companies reported higher confidence in their business prospects at 37% (up 15 points from 22%). Together, this gives an overall confidence of 35%, which is 17 points above last month’s figure of 18%.

The Business Barometer questioned 1,200 businesses, including 100 in Scotland, monthly and provides early signals about UK economic trends both regionally and nationwide.

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Across the country, firms remain resilient and have maintained last month’s increase in economic optimism.

“Nationwide, the survey is consistent with slightly stronger growth in GDP in the first quarter of 2018 than was seen in the last quarter of 2017.”

“As such, these figures reflect a return to cautious optimism for Scottish businesses, which is understandable given the economic uncertainty they still face.”

Overall confidence was highest among businesses in London, at 50%, followed by the North East and East Midlands, both at 42%. “Businesses in the southeast were least confident, with an overall confidence 10 points below the national average of 33%.”

The manufacturing sector reported the highest level of overall confidence at 41%, overtaking construction, where confidence dropped five points to 37% in January.