Although Scottish businesses recorded a confidence score of minus 5.1 for the latest quarter, that marked an improvement on minus 11.9 seen in the previous three months.
ICAEW Scotland president Andrew Hewett said: “While it is always a concern that confidence remains in negative territory, it is somewhat encouraging to see it improving over the last few quarters – albeit slowly.
“There is no doubt that some uncertainty remains amongst business professionals in Scotland, but the fact that there is a degree of optimism over the outlook for the coming 12 months, suggests that there is a belief that things have the potential to improve.”
The ICAEW report said confidence had also been affected by input price inflation rising 1.9 per cent in the past 12 months versus 0.3 per cent a year ago, driven by the double-digit fall in the value of sterling.
It added that firms were now “looking to pass on some of these higher costs” in the coming year, with 17 per cent of businesses in Scotland seeing this as an issue.
More positively, Scottish domestic sales rose 2.4 per cent over the past year and are expected to rise 3.4 per cent over the coming 12 months.
“Predictions for the year ahead also look rather bullish for exports”, with growth of 4.9 per cent anticipated,” the report said.