BUSINESS CONFIDENCE IN SCOTLAND DIPS
Bank of Scotland’s Business Barometer for September 2018 shows:
- Overall confidence for firms in Scotland fell 10 points in the past month to seven per cent
- Economic optimism stood at one per cent, eight points below last month
- Firms’ confidence in their own business prospects was 13 per cent, compared with 25 per cent in August
- Hiring intentions remain steady at six per cent
Business confidence in Scotland fell 10 points during September to seven per cent, according to the latest Business Barometer from Bank of Scotland.
Companies report lower confidence in their business prospects at 13 per cent and lower economic optimism at one per cent.
However, businesses’ hiring intentions have held firm, with a net balance of six per cent of businesses expecting to hire more staff during the next year.
Across the UK, overall confidence rose six points to 29 per cent as firms’ optimism about the economy bounced back after August’s dip, rising nine points to 26 per cent. Businesses’ confidence in their own business prospects rose three points to 32 per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Hann-Ju Ho, senior economist for Bank of Scotland, said: “Overall confidence has dipped but it’s encouraging to see hiring intentions remaining steady. This reinforces our experience of seeing the resilience of Scottish businesses shine through, even during uncertain times.
“With questions surrounding the economic and political future of the UK, it’s not wholly unsurprising to see lower confidence in businesses.
“We will continue to support firms into Q4 as we hope to see increasing stability as the year ends have a positive impact on the confidence on firms across the country.”
September's survey - which was carried out between 3rd and 16th September - found that across Scotland a net balance of six per cent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, down 13 points on a month ago.
Firms in the construction sector were the most confident in September, up five points to 41 per cent, followed by consumer services (33 per cent). Manufacturing businesses, however, saw confidence fall – the only broad sector to do so – declining seven points to 31 per cent.
Hann-Ju Ho continued: “Across the UK, August’s dip in economic confidence and overall business confidence, appears to have been just that – a dip – and has been reversed in September.
"A brighter outlook, while potentially linked to what many firms saw as increasing signs of progress in Brexit negotiations earlier in the month, illustrates a more positive view on the balance of risks facing businesses as they enter the fourth quarter of the year.”
Notes to editors
The Business Barometer’s measure of overall business confidence is the average of responses about how businesses regard the economic outlook and their own trading prospects.
- The overall ‘balance’ of opinion weighs up the percentage of firms that are positive in outlook against those that are negative. Responses are weighted to reflect the composition of the economy.
- The industrial sector in this report represents mainly manufacturing and construction; the consumer services sector comprises distribution and transport & communications; business & other services consists of financial & business services and the public sector.
- The Business Barometer results provide early signals about UK economic trends. The survey started in January 2002 and research is carried out monthly on behalf of Lloyds Bank by BDRC Continental.
- This survey was conducted with around 1,200 companies – including 101 businesses in Scotland - with turnover above £1 million between 3rd and 16th September 2018.