Overall business confidence in Scotland fell eight points during March to minus three per cent, according to the latest Business Barometer from Bank of Scotland Commercial Banking.
Companies in Scotland, surveyed between March 1 and March 15, reported lower confidence in their own business prospects at 10 per cent, compared with 17 per cent in February. When combined with their views on the economy overall, this gives an overall confidence figure of minus three per cent.
Across the UK, overall confidence climbed six points to 10 per cent as firms’ optimism about the economy and their confidence in their own prospects bounced back from February’s lows.
British companies’ confidence in their own business prospects rose seven points to 20 per cent but firms were evenly split on whether they feel optimistic or pessimistic about the economy.
The Bank of Scotland 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 commercial banking, said: “Domestic and global uncertainties are weighing on optimism levels among Scottish businesses at the moment.
“Despite the decrease in confidence, we are committed to supporting businesses’ growth ambitions.
“As part of this commitment, we recently pledged to lend up to £1.6bn to support Scottish firms this year and look forward to seeing confidence increase again in the coming months.”
A net balance of 28 per cent of Scottish 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 13 points on a month ago.
National and sector overview
Businesses in Yorkshire were the most confident, at 21 per cent, ahead of the East Midlands (18 per cent) and London and the West Midlands (both at 17 per cent).
The overall confidence of businesses in the retail sector rose by eight points to reach a four-month high of 22 per cent. Services made an 11-point improvement to seven per cent, but continued to lag behind other sectors.
However, the overall confidence of manufacturing and construction firms fell for a second month, to 10 per cent and 13 per cent respectively, suggesting the outlook in both sectors has dimmed since the start of the year.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking said: “The strengthening of confidence in the first half of this month provides some solace in light of recent pessimism, and there has been a slight improvement in firms’ expectations about the impact of the UK’s departure from the EU.
“However, levels remain below the long-term average and continue to show volatility as political negotiations continue.”