Brexit talks weighing on the confidence levels of Scots firms

Scottish firms have become less confident and are still struggling to hire skilled workers.

The twice yearly Business in Britain report for the Bank of Scotland found Scotland was the second only to Yorkshire and Humber in the list of least confident business regions within the UK.

Over 1,500 companies responded to the survey, with more than half falling in the bracket of annual turnover below £10 million.

Of the Scottish participants, the greatest risk cited to their business growth was the general economic uncertainty.

Just 38% of Scottish firms said they were confident their business interests would be protected or promoted in Brexit negotiations – an 11% drop from the last survey in July – while 46% said a ‘no deal’ outcome to talks between the UK and EU would be negative for their prospects.

Scottish firms also reported continuing problems with the hiring of new staff, with 43% saying they faced issues when recruiting.

The figure is marginally better than seen in July but remains relatively high.

“It’s disappointing to see Scottish businesses towards the bottom of the confidence index but perhaps not unsurprising given the backdrop of economic uncertainty and concern over weak domestic demand,” said Jane ClarkHutchison, regional director of Bank of Scotland.

“While confidence has dropped marginally from July, it’s still broadly in line with the sentiment felt this time last year.

“Encouragingly, Scottish firms remain stoic with their investment and export plans.

“Ultimately, uncertainty is at the front of Scottish business’ minds and we will need to see a shift to return to a position of growth.

“As Brexit negotiations continue to the next phase, we will hopefully see greater clarity which will help businesses to plan carefully and be flexible to see through the next six months and beyond.”