Business confidence in Scotland rose four points during August to 36%, according to the latest Business Barometer from Lloyds Bank Commercial Banking. Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 12 points at 53%. When taken alongside their optimism in the economy, down two points to 19%, this gives a headline confidence reading of 36%. Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (47%), investing in their team (39%) and entering new markets (31%).
A net balance of 24% of businesses in Scotland expect to increase staff levels over the next year; down five points on last month. Overall, UK business confidence increased to its highest level since February last year, jumping 10 points to 41% in August. Optimism in the UK economy also increased in August by 16 points to 37%, and the number of businesses expecting an increase in their trading prospects rose by three points to 46%. The construction, retail and service sectors all saw a rise in business confidence in August.
Services gained 12 points to reach a 22-month high of 42%, while retail firms were up nine points to 44%; an 18-month high. Construction firms’ confidence also increased by 11 points to a four-month high of 42%. In contrast, manufacturing confidence fell for a second consecutive month with a four-point decline to 30%, taking it to the lowest level since April 2023. Chris Lawrie, area director for Scotland at Bank of Scotland, said: “It’s great to see confidence amongst Scottish firms climb this month and to see so many looking at avenues for growth.
“Businesses that invest now in new opportunities will stand themselves in good stead for the years to come. “However, there are challenges, particularly with continued high prices which many firms are finding difficult to navigate.” Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, commented: “Our analysis shows that businesses felt relief that interest rates may be reaching their peak, alongside hopes that measures to tackle inflation are having an impact.
“With trading prospects remaining stable, and hiring and wage intentions also rising, the macro environment for small businesses and those outside the manufacturing sector is more upbeat. “From the data, large firms and manufacturers are experiencing some degree of caution, which is likely to reflect the wider global economic environment and, for manufacturing, the rotation of spending towards services.”
Source: INSIDER
