Scottish business confidence on the rise
Bank of Scotland’s Business Barometer for November 2018 shows:
- Overall confidence for firms in Scotland rose seven points in the past month to 11 per cent
- Firms’ confidence in their own business prospects was 22 per cent, compared with 18 per cent a month ago
- But businesses were evenly split on the economy overall, with as many describing themselves as pessimistic as were optimistic
Business confidence in Scotland rose seven points during November to 11 per cent, according to the latest Business Barometer from Bank of Scotland.
Companies in Scotland report higher confidence in their business prospects at 22 per cent, up four points on the month before.
When asked if Scottish businesses felt optimistic or pessimistic about the economy generally, firms were evenly split with a net balance of zero per cent. This too was also an improvement on last month, when a net balance of nine per cent described themselves as pessimistic.
Together, this gives an overall confidence of 11 per cent, which is seven points above last month’s figure of four per cent.
However, companies’ hiring intentions slowed this month, with a net balance of two per cent of businesses in Scotland expect to cut jobs during the next year. Last month, a net balance of 13 per cent expected to create new jobs.
Across the UK, overall confidence bounced back, climbing five points to 24 per cent as firms’ optimism about the economy rose nine points to 17 per cent. Companies’ confidence in their own business prospects rose two points to 31 per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Fraser Sime, director, SME banking, Bank of Scotland, said: “The belief Scottish businesses have in their own prospects has been on a steady upward trajectory for the last three months and is helping lift overall confidence, which is encouraging.
“While views on the economy are currently at a stalemate, this too is an improvement on a month ago and is reflective of the ongoing uncertainty of the broader UK economic landscape.
“Scottish businesses will be hoping for greater clarity in the coming months, which will help them to plan for the future and hopefully reverse the slowdown in recruitment plans.”
Across the region, a net balance of 24 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 four points on a month ago.
UK regional picture
Businesses in Yorkshire showed the most confidence, at 43 per cent, ahead of the West Midlands (39 per cent) and London (34 per cent).
Those in the East Midlands were the least confident, with an overall confidence of 10 per cent, 14 points below the national average.
Firms in the manufacturing sector saw the largest increase overall, rising by 11 points to 32 per cent, while construction also registered a significant improvement of seven points to 29 per cent.
Retail confidence edged up by one point to 30 per cent, while other services rose five points but still continued to lag behind other sectors at 20 per cent.
Concerns about the impact of leaving the EU were the highest in manufacturing and other services.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking commented: “Following last month’s dip, with business confidence reaching its lowest level since August 2017, it is reassuring to see that business confidence has picked up, helped by stronger economic optimism and hopes of a Brexit deal.”