Scots business confidence holding firm despite Brexit

Confidence levels remained steady at +17 per cent during August, according to the latest Business Barometer from Bank of Scotland. While companies reported lower confidence in their own business prospects, with that measure slipping six percentage points to +25 per cent, there was a seven-point increase in economic optimism to +9 per cent. Companies’ hiring intentions showed a net balance of 6 per cent of businesses in Scotland expect to hire more staff during the next year. However, this is down seven points on the month before. Across Scotland, a net balance of 19 per cent of businesses said they felt that Brexit was having a negative impact on their expectations for business activity, up one point on a month earlier. For the UK as a whole, overall confidence fell seven points to +23 per cent as firms’ optimism about the economy dropped eight points to +17 per cent. Firms’ confidence in their own business prospects dropped five points to +29 per cent. Fraser Sime, regional director for Scotland at Bank of Scotland, said: “To see overall confidence holding firm demonstrates the continued resilience of Scottish businesses during uncertain times. “In an evolving economic and political environment, firms should continue to seek trusted advice and optimise working capital. This will ensure they are well positioned to deal with potential challenges and capitalise on opportunities in order to maximise their full growth potential and play a part in helping Scotland prosper.” Businesses in London and the West Midlands displayed the most confidence, with both areas registering +37 per cent, ahead of the north-west of England (+35 per cent). Those firms in south-east England were the least confident, with an overall confidence reading of just +8 per cent. From a sector perspective, companies in the manufacturing sector remained most confident at +38 per cent, but confidence of construction businesses fell sharply by 12 points to +36 per cent, closely followed by consumer services and “other” services. Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, added: “Business confidence was resilient in the first half of the year, but has eased back recently. This reflects changes in perceptions of Brexit risks, which underscores the importance of current EU-UK negotiations.” The overall “balance” of opinion weighs up the percentage of firms that are positive in outlook against those that are negative.