Business confidence slips in Scotland as UK figures surge

Business sentiment in Scotland has slipped by 15 points in the past month, despite UK-wide figures charging to a 14-month high.

Fraser Sime, regional director at Bank of Scotland: 'Its evident that levels of uncertainty among Scottish businesses remain elevated.' Picture: Contributed

The Bank of Scotland’s business barometer found that confidence among Scots firms fell to -4 per cent in January, as Brexit-related issues continued to drag on activity.

Scottish companies reported lower confidence in their own business prospects at -2 per cent, while a net balance of 3 per cent said they expect to reduce staff during the next year, compared to 3 per cent expecting to take on more staff last month.

This contrasted with UK figures, which were firmly in positive territory. UK-wide confidence rose 13 points to 23 per cent as economic optimism soared 22 points higher to 24 per cent.

British businesses also reported increased confidence in their own prospects, up four points to 22 per cent.

Across Scotland, a net balance of 19 per cent of businesses felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, up eight points on a month ago.

Experts are now looking ahead to the rest of 2020, with the United Nations climate change conference in Glasgow in November being billed as a potential opportunity.

'Elevated uncertainty'

Fraser Sime, regional director at Bank of Scotland, said: “It’s evident that levels of uncertainty among Scottish businesses remain elevated.

“Despite this month’s dip in confidence, it’s encouraging to see opportunity on the horizon, including the COP26 United Nations climate change summit, which is being hosted in Glasgow later this year. That will shine a spotlight on sustainability in Scotland and the great businesses that are working to become greener.”

The Bank of Scotland survey questions 1,200 businesses monthly to provide early signals about UK economic trends.

Businesses in London had the highest confidence at 38 per cent this month, ahead of the South-west at 34 per cent and the East Midlands at 31 per cent.

UK averages showed marked improvements in sentiment from the construction and services sectors, while confidence in the retail industry edged higher.

Manufacturing was the only sector which experienced a fall, with confidence declining six points to 21 per cent.

Paul Gordon of Lloyds Bank Commercial Banking, said: “It is hugely encouraging to see a significant increase in business confidence for firms up and down the UK. However, Scotland saw a sharp decline, moving the region into negative sentiment.

“The overall buoyed results are also reflected by improvements in three of the four sectors and we hope that more businesses plan for growth as we continue into 2020.”