Scottish business confidence slumps but growth remains on the cards

Business confidence in Scotland has taken a dive despite firms flagging a range of growth opportunities in the months ahead, a survey today suggests.

Confidence north of the Border fell 18 percentage points during March to a reading of 17 per cent, according to the latest business barometer from Bank of Scotland Commercial Banking.

Companies reported lower confidence in their own business prospects month-on-month, down 24 points at 18 per cent. When taken alongside their optimism in the economy, down 12 points to 16 per cent, this gives the headline confidence reading of 17 per cent.

Despite the fall in confidence, Scottish businesses have identified a range of growth opportunities for the next six months, including investing in their teams (39 per cent of all of those polled), diversifying into new markets (30 per cent) and evolving their offering, such as introducing new products or services (28 per cent).

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking: 'The current economic climate is understandably proving challenging for Scottish firms.'

The barometer, which quizzes some 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “The current economic climate is understandably proving challenging for Scottish firms, with rising energy prices, inflation and the ongoing war in Ukraine combining to create a myriad of headwinds.

“The nation's businesses have proven their resilience over the past two years and will be braced for the months ahead.”

From a sector perspective, the impact of the crisis in Ukraine appears to have had the greatest impact on manufacturing and retail firms. Both sectors saw drops in confidence of 19 points from February’s highs (to 35 per cent and 28 per cent, respectively).

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