Business confidence in Scotland rose 24 points during March to 38%, according to the latest Business Barometer from Bank of Scotland Commercial Banking – conducted between March 1-15 ahead of the Chancellor’s Spring Budget on Wednesday, March 15.

Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 34 points at 41%. When taken alongside their optimism in the economy, up 15 points to 35% this gives a headline confidence reading of 38%.

Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (37%), entering new markets (35%) and investing in sustainability (30%).

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

A net balance of 33% of businesses in the region expect to increase staff levels over the next year, up 34 points on last month.

Overall UK business confidence climbed 11 points to 32% in March, with firms reporting their highest confidence levels since May last year.

On average, firms felt positive about their own trading prospects with 39% of firms expecting business activity to increase in the next 12 months, up eight points on last month and 25% said they would increase staff levels by this time next year, up five points month-on-month.

Every UK region and nation had a positive confidence reading in March, with eight out of 11 regions recording a month-on-month increase in confidence. For the second month in a row the West Midlands reported the highest levels of business confidence at 48% (unchanged month-on-month), followed by Scotland (up 24 points), London (up 20 points), and the North East (up two points) all at 38%.

Chris Lawrie, Area Director for Scotland at Lloyds Bank Commercial Banking, said: “Scottish businesses are feeling confident about the months ahead and It’s great to see firms' optimism in the overall economy is at its highest level since May 2022.

“With the winter months behind us, firms will likely be preparing for the brighter – and often busier – summer period. Businesses that keep a close eye on cash flow and manage their working capital will be best placed to capitalise on opportunities. We’ll continue to be by the side of Scottish businesses to help steer them through what we hope will be a strong spring and summer season.”

There was a broad rise in business confidence across the sectors, particularly in construction (47% up 28 points) and manufacturing (37% up ten points) both at a ten-month high and retail (32% up 11 points) the highest since February 2022.

Paul Gordon, Managing Director for Relationship Management, Lloyds Bank Business & Commercial Banking, said: “It’s great to see economic optimism as well as trading prospects at a ten-month high. We can see from the data that this could well be down to a combination of a less obstructive hiring environment and the longer-term wage pressures trending downwards.

“As we look ahead, growth and investment must be the watch words for businesses across all sectors. This will help build future resilience against an uncertain economic landscape.”

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “Business confidence has seen a surge this month with economic optimism and trading prospects bolstering firms. With hiring intentions improving, we may see employment growth picking up in the coming months. Tentative signs of easing wage pressures suggest that businesses’ difficulties in finding staff may have started to ease.

“Although the measures in the Budget were widely trailed, it is yet to be seen what the full impact of the Chancellor's announcement, along with the surprise rise in inflation and recent increase in interest rates, will have had on business confidence.”

More like this…

View all