Scots companies in hiring mode as confidence jumps

● Results ‘encouraging’ but firms north of Border only catch up with rest of UK

Scottish firms are planning a jobs boost as confidence rebounds, a key report today suggests.

Business confidence north of the Border rose 17 points during February to reach 35 per cent, according to the latest business barometer from Bank of Scotland’s commercial banking arm.

Companies’ hiring intentions also gathered pace with a net balance of 27 per cent of businesses in Scotland now expecting to take on more staff during the next year, up 23 points on last month.

Across the UK as a whole, overall confidence slipped two points to 33 per cent, driven mainly by a fall in firms’ confidence in their own business prospects, the report found.

The barometer polls some 1,200 businesses monthly, including about 100 in Scotland, and provides early signals about UK economic trends both regionally and nationwide. Overall confidence was highest among businesses in London, at 50 per cent, followed by the north-east of England and the East Midlands, both at 42 per cent.

Fraser Sime, regional director at Bank of Scotland Commercial Banking, said: “It’s encouraging to see confidence rise among Scottish businesses, but one positive month doesn’t reflect the entire picture seen across the country.

“While notably higher than in January, firms’ overall confidence and their hiring intentions are now only in line with the average across the UK.

“As such, these figures reflect a return to cautious optimism for Scottish businesses, which is understandable given the economic uncertainty they still face.”

Economic optimism in Scotland rose to 33 per cent in February – up 20 points from the 13 per cent registered the previous month – while companies reported higher confidence in their business prospects at 37 per cent (up from 22 per cent).

Hann-ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Across the country, firms remain resilient and have maintained last month’s increase in economic optimism.

“Nationwide, the survey is consistent with slightly stronger growth in GDP in the first quarter of 2018 than was seen in the last quarter of 2017.”

The manufacturing sector reported the highest level of overall confidence at 41 per cent, overtaking construction, where confidence dropped five points to 37 per cent in January.

Elsewhere, confidence in consumer services – which includes retail – rose from 27 per cent to 31 per cent, driven by stronger retail sentiment, which leapt 20 points from 17 per cent to 37 per cent.

The business barometer survey started in January 2002 and research is carried out monthly on behalf of Bank of Scotland by BDRC Continental. The measure of overall confidence is the average of responses about how firms regard the economic outlook and their own prospects.