Scottish companies losing confidence as retail sales stumble

Optimism: Survey shows fewer firms are planning to add staff this year

Overall confidence for Scottish firms fell markedly this month with fewer likely to add staff this year, according to the latest Business Barometer report from the Bank of Scotland.

A net balance of 18% of Scottish firms expecting business activity to increase and a balance of just 5% now saying they are more optimistic about the economy than they were three months ago.

The survey gives an overall confidence rating of 12% compared to 35% last month.

Jane Clark-Hutchison, from the Bank of Scotland, said: “Scottish businesses are feeling the effects of uncertainty, which is why we have seen a fall in economic confidence at the end of the quarter. However, this still remains in positive territory.

“As a result, we are still seeing businesses looking to hire and planning for growth with a sense of cautious optimism, which is encouraging considering the unsettled landscape.”

Companies’ hiring intentions also fell. However, a net balance of 10% of firms still expect to hire more staff during the next year.

Nationally, overall confidence fell one point to 32%, driven by a dip in firms’ economic optimism.

Meanwhile, the ‘beast from the east’ had an impact on retail sales this month, according to the CBI’s Distribution Trades Survey. It revealed a weak month for retailers, with year-on-year sales volumes declining for the first time since October 2017.

Additionally, sales for the time of year were significantly below normal, and by the greatest extent since April 2013.

The volume of orders placed with suppliers, meanwhile, was broadly unchanged.

Scottish businesses are feeling the effects of uncertainty. JANE CLARK HUTCHISON BANK OF SCOTLAND