Scots business confidence stumbles - but firms expect festive trading to sparkle

Business confidence in Scotland retreated in November – but firms are bullish about their trading prospects as a “busy” festive season approaches, according to a report out today.   

The latest Business Barometer from Bank of Scotland Commercial Banking found that business optimism north of the Border fell by four points during the month to 27 per cent. 

That fell some way behind UK business confidence, which was “buoyant” at 40 per cent, down just three points on October’s reading, while all nations and regions across the country had positive confidence readings in November, said the lender.

It states that the monthly survey of 1,200 businesses provides early signals about UK economic trends both regionally and nationwide. 

Fraser Sime of Bank of Scotland Commercial Banking said Scotland’s hospitality and leisure industry will be hoping for a busy festive season. Picture: Lisa Ferguson.

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A net balance of 14 per cent of companies in Scotland expect to increase staff levels over the next year, down 16 points on last month – and compared to 30 per cent for firms across the UK.

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “While Scottish business confidence dipped slightly in November, overall levels remain positive and firms remain optimistic about their trading prospects as we head into a busy festive season. Consumers appear intent on celebrating in style this year – and Scotland’s world-leading hospitality and leisure industry will be hoping for a boon in the coming months.

“While winter may generate some uncertainty for some firms, not least those grappling with supply-chain issues, we’ll continue to stand by businesses across Scotland.”

At a sector level, confidence slipped in manufacturing (42 per cent) to its lowest since August, linked to ongoing supply-chain disruptions, while it fell to a seven-month low of 28 per cent in construction.

In contrast, the retail sector (45 per cent) bucked the trend with increased confidence, while services optimism dropped slightly to 41 per cent, with resilient growth for financial and business services and communications offset by more “downbeat” responses from education, health and public administration.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Business confidence remains robust above the long-term average, but it dipped this month as economic optimism and trading prospects were affected by the persistence of rising costs and supply-chain issues.”

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