Martyn Kendrick

Scottish businesses reported higher confidence in their own business prospects month-on-month, up 15 points at 65%. When taken alongside their optimism in the economy, down 11 points to 44%, this gives a headline confidence reading of 55% (vs. 53% in February).

Looking ahead to the next six months, businesses in Scotland identified their top target areas for growth as investing in their team, for instance through training (46%), evolving their offering, for example by introducing new products or services (43%) and entering new markets (36%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide. This data was gathered between the 3rd – 17th March, ahead of the Spring Statement.

National picture

Overall, UK business confidence was 49% in March – the same as in February.

While firms’ optimism in their own trading prospects held steady at 57%, their confidence in the wider economy dropped one point to 40%.

The West Midlands and London were the joint most-confident of any UK nation or region in March (both 62%), followed by the North West (59%).

Sector insights

Retail confidence rose seven points to 58%, a post-pandemic high, reflecting positive trading prospects.

In contrast, the manufacturing sector saw the largest decrease in business confidence this month, declining 12 points to 39%, due to increased concerns about supply chain disruptions. Construction firms also saw a decline to 48% and businesses in the service sector saw confidence decline to 47%.

Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking, said: “It’s great to see business confidence in Scotland continuing to climb and remaining above the UK average, buoyed by stronger confidence from firms in their own trading prospects.

“Scottish businesses are focused on further growth. Whether their strategies involve investing in their team or tapping into new markets, we’ll continue to support them in their ambitions.”

Hann-Ju Ho, senior economist, Lloyds Commercial Banking, said: “Business confidence remained steady this month, suggesting that UK companies may have been waiting to see the impact of government decisions at home and globally. Despite this, today’s data continues to reflect a positive growth trend in the UK economy. With confidence maintaining last month’s high, business leaders are optimistic, noting that investing in their development and workforce will position them well to seize future growth opportunities.”

Paul Kempster, managing director for Commercial Banking Coverage, Lloyds Business & Commercial said: “The findings of the latest Business Barometer are encouraging, maintaining the previous month’s uplifted business confidence and economic optimism across the UK.

“At Lloyds, we are committed to supporting businesses and our range of financial services and expertise are designed to help firms navigate the evolving economic landscape, seize new opportunities, and achieve their growth ambitions.”