Business confidence in Scotland fell three points during April to 48%, according to the latest Business Barometer from Bank of Scotland.
Companies in Scotland reported lower confidence in their own trading outlook month-on-month, down 10 points at 53%. When taken alongside their optimism in the economy, up four points to 43%, this gives a headline confidence reading of 48% (vs. 51% in March).
However, despite the fall, Scotland’s confidence figure for April surpassed the UK’s combined total for the first time this year.
Looking ahead to the next six months, Scotland businesses identified their top target areas for growth as investing in their team, for example through training (41%), entering new markets (40%), and introducing new technology, such as AI or automation (38%).
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
Amanda Murphy, CEO for Lloyds Business and Commercial Banking said: “Businesses told us their confidence fell as inflation pressures re-emerged, global uncertainty persisted and costs remained elevated. While sentiment declined, it remained above the long-term average, with nearly two-thirds expecting stronger output in the coming year.
“UK businesses are resilient and adept at deploying strategies to defend growth in uncertain conditions. Over the past month, we’ve seen them opt for flexibility wherever possible. They’re building contingency into their short and medium-term plans, rather than expecting a rapid return to normal. Protecting margins has become more important. That means tougher cost scrutiny and a greater focus on balancing growth with profitability.
“In this environment, as with other recent market disruptions, we continue to observe that sustainable success comes from discipline, resilience and clarity about what really drives long term value.”
National picture
Overall, UK business confidence fell 11 points in April to 44%.
Firms' confidence in their own trading outlook fell six points to 54%, and their optimism in the wider economy dropped 17 points to 33%.
The East Midlands was the most confident UK nation or region in April at 53%, followed by London at 51% and the West Midlands at 49%.
Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking, said: "While business confidence has dipped this month, Scottish firms continue to invest in their future and thinking strategically about defending their growth, as they navigate global volatility.
"We're here to support businesses across Scotland as they pursue these plans, whether that's financing expansion, technology investment, or developing their workforce.”