Increase in optimism
Business confidence rises in Scotland
Scottish companies reporting higher confidence in prospects stood at at 37% (up 15 points) and higher economic optimism at 33% (up 20 points), says the latest Business Barometer from Bank of Scotland Commercial Banking.
Together, this gives an overall confidence of 35%, which is 17 points above last month’s figure.
Companies’ hiring intentions showed that a net balance of 27% of businesses in Scotland now expect to hire more staff during the next year, up 23 points on last month.
Across the UK, overall confidence fell two points to 33%, driven mainly by a fall in firms’ confidence in their own business prospects.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Fraser Sime, regional director at the Bank of Scotland Commercial Banking, said: “It’s encouraging to see confidence rise among Scottish businesses, but one positive month doesn’t reflect the entire picture seen across the country.
“While notably higher than in January, firms’ overall confidence and their hiring intentions are now only in line with the average across the UK.
“As such, these figures reflect a return to cautious optimism for Scottish businesses, which is understandable given the economic uncertainty they still face.”
Overall confidence was highest among businesses in London, at 50%, followed by the North East and East Midlands, both at 42%.
“Businesses in the South East were least confident, with an overall confidence 10 points below the national average of 33 per cent.”
Manufacturing takes lead as construction slips
The manufacturing sector reported the highest level of overall confidence at 41%, overtaking construction, where confidence dropped five points to 37% in January.
Elsewhere, confidence in consumer services – which includes retail – rose from 27% to 31%, driven by stronger retail sentiment, which leapt 20 points to 37%.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Across the country, firms remain resilient and have maintained last month’s increase in economic optimism.
“Nationwide, the survey is consistent with slightly stronger growth in GDP in the first quarter of 2018 than was seen in the last quarter of 2017.”