Scotland's economy: business confidence levels fall

Confidence levels among Scottish businesses have slipped over the last six months in stark contrast to their counterparts south of the Border, a Bank of Scotland report today reveals.

Bank of Scotland says overall confidence remains positive despite the decline seen since January. Picture: Steven Scott Taylor
Bank of Scotland says overall confidence remains positive despite the decline seen since January. Picture: Steven Scott Taylor

The Business in Britain survey – based on data gathered after the snap general election was called – shows that the Scottish business confidence index, which measures a respondent’s expected sales, orders and profits over the next six months, eased to 19 per cent, from January’s score of 21 per cent.

In contrast, the confidence index for England and Wales rose by 10 percentage points to 24 per cent.

The Business in Britain report, now in its 25th year, gathers the views of more than 1,500 UK companies, predominantly small to medium-sized businesses, and tracks the overall “balance” of opinion on a range of key performance and confidence measures.

Fraser Sime, regional area director for SME, Bank of Scotland, said: “Overall confidence in Scotland has decreased slightly since our last survey in January but remains positive.

“The fact that it remains only slightly lower than at the start of the year, despite the political uncertainty from a snap election, is a positive sign for underlying confidence in the region and is testament to the resilience of Scotland’s business owners.”

Meanwhile, the proportion of Scottish firms that said that they had experienced difficulty in recruiting skilled labour in the last six months increased to 45 per cent, compared with 34 per cent in January.

And a separate report shows that the health of small and medium-sized enterprises (SMEs) in the UK has fallen to its lowest level in three years.

The SME Health Check Index – a new quarterly barometer compiled by the Centre for Economics & Business Research (CEBR) think-tank in association with Clydesdale Bank owner CYBG – measures business performance and the macroeconomic environment affecting SME. Factors include the level of bankruptcies, business costs, confidence, employment, lending and revenue.

Unveiling the maiden report, CYBG chief executive David Duffy said: “Small and medium-sized businesses are the absolute engine room of the British economy, and their future prospects are going to be ever more critical in a post-Brexit world, where we are dependent on a stronger and more competitive domestic economy.

“It is vital that we understand how SMEs are performing.”