Survey shows fall in business confidence

Scottish business confidence fell last month as more firms felt Brexit was negatively affecting their future expectations according to the Bank of Scotland’s Business Barometer.

The survey of 1,200 UK businesses found that overall confidence for firms in Scotland fell three points last month.

A net balance of 9% of Scottish businesses now say they are pessimistic about the economy, compared with a month ago, when a balance of 1% said they were optimistic.

Despite this, firms’ confidence in their own business prospects rose five points to 18%.

Across Scotland, a net balance of 28% 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, an increase of 22 points on a month ago.

Fraser Sime, SME banking director, Bank of Scotland, said: “Ongoing uncertainty appears to be weighing heavily on businesses’ optimism for the economy across the UK.

“However, it’s slightly more encouraging to see firms reporting growing confidence in their own business prospects and an increase in hiring intentions.

“This suggests a resilience that may prove to be valuable as companies await greater clarity on the UK’s future trading relationship.”

Overall confidence fell significantly in construction (down 19 points), manufacturing (down 10 points).

Lloyds Bank senior economist Hann-Ju Ho said: “Business confidence is continuing to fall as firms become less optimistic about the wider economy and is impacted by the mixed rhetoric on the progress being made in the ongoing EU-UK negotiations.”

Fraser Sime of Bank of Scotland.