Scots business confidence ‘lowest in UK’

Last year marked the first annual decline in consumer spending in the UK in five years. Picture: Getty
Last year marked the first annual decline in consumer spending in the UK in five years. Picture: Getty
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Business confidence in Scotland is among the lowest in the UK, a survey has found.

The Bank of Scotland’s 
Business In Britain report, which looks at expected sales, orders and profits over the next six months, fell two points to 17 per cent in 
Scotland from 19 per cent in July.

Only Yorkshire and the Humber ranked lower for business confidence, at 15 per cent, while the north-east of England came top at 38 per cent and the UK average was 24 per cent.

A total of 1,516 UK companies responded to the report, which tracks performance and confidence, weighing up the percentage of firms positive in outlook against the negative.

It follows a Federation of Small Businesses report last week which found Scottish business confidence was at a “near record low”, having dropped to minus 21.4 points.

The Bank of Scotland report found economic uncertainty was the greatest risk to Scottish firms, with 27 per cent concerned, up from 22 per cent six months ago.

The proportion of Scottish firms citing weaker UK demand as the greatest risk facing them rose to 18 per cent from 14 per cent in the same period.

Just less than half (43 per cent) said they had difficulties hiring skilled labour, while the number of firms expecting to increase wages dropped by six points to 15 per cent in the same period.

However, the share of Scottish firms anticipating stronger total exports remained positive at 17 per cent and the net balance of those looking to grow investment remained stable at 2 per cent.

The proportion of Scottish firms confident about business prospects in the Brexit negotiations fell to 38 per cent from 49 per cent, while those who said they lacked confidence in this regard rose ten points to 35 per cent.

Nearly half (46 per cent) of Scottish respondents said 
that no trade agreement 
with the EU would be negative for their business, with 14 per cent believing it would be positive.

Jane Clark-Hutchison, Bank of Scotland regional director, said: “It’s disappointing to see Scottish businesses towards the bottom of the confidence index but perhaps not unsurprising given the backdrop of economic uncertainty and concern over weak domestic demand.

“While confidence has dropped marginally from July, it’s still broadly in line with the sentiment felt this time last year.

“Encouragingly, Scottish firms remain stoic with their investment and export plans.

“Ultimately, uncertainty is at the front of Scottish business’ minds and we will need to see a shift to return to a position of growth.

“As Brexit negotiations continue to the next phase, we will hopefully see 
greater clarity, which 
will help businesses to 
plan carefully and be 
flexible to see through the next six months and beyond.”