Confidence in Scotland rose 17 points during June while firms’ job creation plans hit a 12-month high, according to the latest Business Barometer from Bank of Scotland Commercial Banking.
Companies in Scotland report higher confidence in their business prospects, which rose 15 points to 32%, and higher economic optimism, which rose 19 points to two%. Together, this gives an overall confidence of 17%.
The hiring intentions of businesses in Scotland have also reached its highest level since May 2018, with a net balance of 20% planning to create new jobs in the next year, 23 points higher than last month.
Across the UK, overall confidence grew three points to 14% as firms’ confidence in their own prospects grew six points to 23%, while their economic optimism also grew by four points to six%.
The 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, said: “It’s encouraging to see not only a rise in confidence among Scottish businesses but also that this is translating into intentions to employ more people in 2019. This is hopefully the start of a more continued optimistic outlook on the year ahead for firms across all sectors.
“To encourage firms’ growth plans, we’ve pledged to lend £1.6bn to Scottish businesses in 2019. This will enable them to take advantage of the opportunities for growth that emerge as we continue to navigate through an uncertain social and economic environment.”
Across Scotland, a net balance of 29% of businesses says they feel the UK’s exit from the European Union is having a negative impact on their expectations for business activity, down 18 points on a month ago.
Regional picture
Businesses in the West Midlands show the most confidence at 25%, ahead of those in London (18%).
Those in the Yorkshire and Humber are the least confident, with an overall confidence of five per cent, down 18 points, and eight points below the national average.
National overview
Business confidence increased in the retail sector, up by 11 points to 22%. Gains were also seen in construction, up to five points to 17%, and in the services sector, up to five points to 12%. In contrast, confidence in the manufacturing sector fell by 11 points, bringing June’s figures back in line with the low seen earlier this year.
Hann-Ju Ho, the senior economist, Lloyds Bank Commercial Banking, said: “While overall business confidence is still below the long-term average, it is encouraging to see a rise for the third time in four months since the low in February.
“Firms are showing more optimism both in their trading prospects and the overall economy, with levels rising in the retail, construction and services sectors this month. Ongoing global trade tensions, however, appear to have weighed on manufacturing confidence.”
