BUSINESS confidence in Scotland rose during June, according to a study.
The latest barometer from Bank of Scotland found companies were 24% positive about their prospects, nine points higher than in May.
Overall confidence across the UK fell by six to 29%.
Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, praised the results. He said: “It’s encouraging to see the gradual rise in confidence across the country leading to a boost to recruitment plans throughout Scotland.
“Given the economic uncertainty the country’s businesses are facing, rising confidence in one month does not mean it’s plain sailing for anyone.
“But the fact that the underlying trend is positive suggests firms are slowly becoming more comfortable with uncertainty as the new normal.
“The challenge we face now is to keep these levels steady and support the rise in economic optimism to ensure businesses reach their full growth potential.”
Companies in Scotland report confidence in their business prospects at 29% and economic optimism at 18%.
Hiring intentions show a net balance of 16% expecting to hire more staff during the next year, up 10 points on last month.
Across Scotland, 16% say they feel Brexit is having a negative impact on their expectations for business activity, down nine points on May.
The study also reveals confidence in Scotland rose by two points during the second quarter of 2018.
Companies were 23% positive about their prospects moving forward between April and June.
Companies’ hiring intentions show a net balance of 16% of businesses in the region expect to hire more staff during the next year, up 10 points on last month.
Longer term, the underlying trend in Scotland during this year shows businesses’ confidence growing slowly despite the fact that they are becoming less optimistic about the state of the UK economy overall.
Meanwhile, 46% of Scottish companies expect the Bank of England to increase interest rates this year, with the average firm indicating that raising rates to one per cent would have a significant negative impact on their business.
Confidence is strongest among transport and communications services businesses, at 50% and 48% respectively, while construction rose five points to 45%.
Manufacturing firms report increased confidence at 35%, compared with 31% last month, but confidence among consumer firms fell 11 points to 29%.
Confidence in business and finance stands at 25%, and at 22% in retail.
Commenting on the drop in confidence levels across the UK, Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Increased global trade tensions and Brexit uncertainties are likely to have weighed on confidence, but it’s still near the long-term average and so there’s no need to hit the panic buttons.”
The Business Barometer questions 1200 businesses monthly – including 100 in Scotland – with turnover above £1 million between June 1 and 15 this year.
The 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 Continentals both regionally and nationwide.
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