Jobs boost as Scots businesses report brighter outlook

The number of Scottish firms looking to take on staff is rising on the back of growing confidence in the outlook for their businesses and the wider economy, according to a new survey.

The Citibase report found that 65 per cent of Scottish SMEs were yet to formulate a mitigation strategy for Brexit. Picture: Jon Savage

The latest Business Barometer report from Bank of Scotland Commercial Banking, conducted before coronavirus became a major issue, also showed a fall in the number of companies which felt Brexit was having a negative impact on their expectations for business activity.

However, a separate survey from office space firm Citibase has found that almost two-thirds of Scottish SMEs were yet to put a mitigation strategy in place for Brexit.

Fraser Sime, the bank’s regional commercial director for Scotland, said the latest index figures showed Scottish businesses were showing “resilience” despite the challenges faced.

“However, companies are likely to act with an element of caution throughout 2020 as some political and economic uncertainty remains.”

The index showed Scottish companies reported higher confidence in their business prospects in February, rising 16 points to a positive balance of 14 per cent. Economic optimism rose 20 points to 15 per cent for an overall index rating of 15 per cent.

This was reflected in businesses’ hiring intentions, with a net balance of 5 per cent of businesses in Scotland expecting to hire more staff during the next year, up eight points on last month.

Negative impact

A net balance of 8 per cent of Scottish businesses said that they felt the UK’s exit from the European Union was having a negative impact on their expectations for business activity, compared to 19 per cent a month ago.

Across the UK, overall confidence was unchanged on last month at 23 per cent as firms’ optimism in the economy and confidence in their own prospects held steady.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Businesses in London had the highest confidence at 29 per cent, ahead of the West Midlands at 28 per cent, and the East Midlands at 27 per cent.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The buoyed sustained results signal a return to economic growth for the first quarter of 2020 after a relatively flat final quarter end to 2019. The third consecutive rise in trading prospects and a swing to positive sentiment on the expected impact of leaving the EU are all tentative signs of improvement after the soft end to last year.”

Meanwhile, the Citibase report found that 65 per cent of Scottish SMEs were yet to formulate a mitigation strategy for Brexit. Businesses questioned said the potential loss of foreign investment from Brexit along with the falling value of the pound and environmental issues posed the greatest threats to their operations.