Bank of Scotland’s Business Barometer reveals business confidence decrease
Business confidence in Scotland decreased by nine points within a month to minus 9%, the Bank of Scotland Business Barometer has indicated.
The Business Barometer surveys 1,200 businesses monthly and provides early signals about UK economic trends regionally and nationwide.
In a survey for publication in August, Scottish companies reported lower confidence regarding their own prospects, which fell six points to a net balance of zero. Their view of the wider economy is taken into consideration within the overall measure of minus 9%.
The hiring intentions of businesses showed a net balance of 15% of businesses in Scotland expecting to reduce staffing levels within the next year, this was up 12 points on last month.
A further net balance of 38% of businesses in Scotland said Brexit was harming their expectations for business activity, up 13 points to a month ago. Similarly, confidence within Britain decreased to 1%, as businesses became less optimistic about the economy, while confidence in their own prospects fell to 8%.
Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “It’s evident that UK and international uncertainties are affecting the confidence levels of businesses in Scotland. We remain committed to helping businesses access the opportunities that continue to present themselves across all sectors.”
Across Britain, business confidence in the construction sector rose by six points to 12%, but confidence fell by 16 points to 3% in the manufacturing sector, and by 11 points to 6% in retail, the lowest this year. Confidence also fell by 15 points to minus 3% in the services sector, bringing it close to the February low of minus 4%.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “We have seen a dip in overall business confidence this month, with firms appearing less positive about their own trading prospects and the broader economy, and remaining low against the historic average. While ongoing economic uncertainty is likely a key driver, it’s worth noting that companies’ assessment of the expected impact on their business of the UK leaving the EU has remained broadly unchanged this year.”