Confidence falls for second consecutive month
Bank of Scotland’s Business Barometer for August 2019 shows:
- Overall confidence for firms in Scotland fell nine points in the past month to minus nine per cent
- Firms’ confidence in their own business prospects was zero per cent, compared with six per cent in July
Business confidence in Scotland fell nine points during August to minus nine per cent, according to the latest Business Barometer from Bank of Scotland Commercial Banking.
Companies in Scotland reported lower confidence in their business prospects, which fell six points to a net balance of zero. When combined with their view on the economy, this gives an overall confidence of minus nine per cent.
Businesses’ hiring intentions showed that a net balance of 15 per cent of businesses in Scotland expect to reduce staffing levels during the next year, up 12 points on last month.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “It’s evident that UK and international uncertainties are effecting the confidence levels of businesses in Scotland.
“We remain committed to helping businesses access the opportunities that continue to present themselves across all sectors.
“We’ve pledged to lend up to £1.6 billion to Scottish firms during 2019. We will be by their side as they work towards a more confident future.”
Across Scotland, a net balance of 38 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, up 13 points on a month ago.
Businesses in the West Midlands showed the most confidence, at 15 per cent, ahead of the South West (11 per cent) and London (seven per cent).
In August, business confidence in the construction sector rose by six points to 12 per cent. Meanwhile, overall confidence fell by 16 points to three per cent in the manufacturing sector, and by 11 points to six per cent in retail, the lowest levels seen for those sectors this year.
Confidence was also down 15 points to minus three per cent in the services sector, bringing it near to the February low of minus four per cent.
Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, said: “We continue to see variations month to month in overall business confidence, and across sectors and regions. Although the outlook appears less positive this month, there were improvements seen in the construction sector, signalling some resilience in the UK economy. What is highly likely is that we will continue to see further fluctuation in the months ahead.”
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.”
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