Tag: August 2021

Scottish business confidence climbs as restrictions ease

Bank of Scotland’s Business Barometer for August 2021 shows:

  • Scottish business confidence rises six points in August to 34%
  • Firms’ hiring intentions jump 13 points with 34% planning to create jobs in the next 12 months
  • Overall UK business confidence reaches 36% – the highest reading since May 2018 – as all regions and nations report positive confidence levels

Business confidence in Scotland rose six points during August to 34%, according to the latest Business Barometer from Bank of Scotland Commercial Banking. 

The full easing of lockdown restrictions in Scotland in August was a clear boost for businesses, with overall confidence in the economy also rising by 20 points to 43%.

Companies in Scotland reported marginally lower confidence in their own business prospects month-on-month, down eight points at 25%.  When taken alongside their optimism in the economy, this gives a headline confidence reading of 34%.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

A net balance of 20% of businesses in Scotland expect to increase staff levels over the next year, up seven points on last month.

Overall UK business confidence rose six points in August, reaching 36%, the highest level recorded since May 2018. When asked about their overall trading prospects businesses reported a six-point increase on July’s reading at 34% and firms’ confidence in the economy also increased six points to 39%.

All UK nations and regions had a positive confidence reading in August. The most confident regions were the North West (64%), North East (46%) and London (41%). All bar three areas reported a growth in confidence in August, with the East Midlands (down 10 points to 28%), West Midlands (down three points to 27%) and Yorkshire and Humber (down two points to 26%) reporting marginal falls.

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “With most of the Covid-19 restrictions easing in August, businesses across Scotland were able to return to normal trading for the first time in 18 months and are feeling optimistic about what this means for the economy.

“With confidence on the up and even more firms are now planning on making new hires, the country is taking great steps towards recovery and growth. We’ll continue to support businesses through the coming months as they aim to capitalise on this positive momentum.” 

In sector terms, there was notable strength in sectors benefiting from the further easing of Covid restrictions. Services confidence saw the greatest month-on-month increase, rising by 8 points to 36%, the highest level since January 2018.

Confidence in both manufacturing and construction also picked up (both up 7 points to 40%), led by rises in trading prospects for the year ahead.

The increase in manufacturing confidence came despite ongoing supply disruptions, although the level remains below the high in May. Retail confidence posted a smaller 2-point rise to 34%, remaining below the recent peak in May.

Gareth Oakley, Managing Director for Business Banking, Lloyds Bank, said: “Since the start of the year business confidence has been increasing, and August has been a particularly strong month. Many of the regions have seen significant upticks in confidence and it’s encouraging that Northern Ireland has moved back into positive territory.

“It is clear there is still some level of uncertainty on inflation and the impact of price pressures, but with further boosts to confidence in the services, manufacturing and construction sectors we can be hopeful that demand across all sectors will drive consumption throughout the rest of the year. The last few months of the year will be pivotal to the future of UK economic growth and we remain by the side of businesses as the country continues to reopen.”

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “Business confidence reaching its highest level in over four years tells a positive story about the country’s economic recovery.

“This confidence is driven by the continued success of the vaccine ollout, the removal of lockdown restrictions and adjustments to self-isolation rules.

“Staff shortages remain a challenge, but as the economy moves back towards pre-pandemic levels we can be optimistic that the momentum for business confidence and economic optimism can be sustained in the months ahead.”

Childcare expansion from August next year

All eligible children will benefit from at least 1,140 hours of funded early learning and childcare (ELC) from August 2021, the Children’s Minister has announced.

The expansion of funded ELC, originally intended for August 2020, was paused in April to give local authorities the flexibility to focus on responding to the coronavirus (COVID-19) pandemic.

A new date has now been agreed with local authority umbrella group COSLA.

Children’s Minister Maree Todd said: “I’m very pleased that we now have a new date for the full implementation of expanded ELC, and that children will benefit from more high quality funded childcare.

“We took the difficult decision in August to pause the statutory roll-out to allow local authorities to focus on responding to the pandemic and providing critical childcare, which was crucial to supporting key workers.

“The pandemic has had an obvious impact on construction and recruitment plans across the country, however local authorities have worked exceptionally hard and continued to make good progress in very challenging circumstances, and the majority of children receiving funded ELC are already receiving 1,140 hours.

“We were always clear that the suspension of the statutory duty on local authorities to provide 1,140 hours was a pause, not a stop. We will continue to work with partners over the coming months to deliver this transformational policy that will benefit families across the country.”

COSLA’s Children and Young People’s Spokesperson Councillor Stephen McCabe said: “Local government remains committed to increasing the number of funded early learning and childcare hours, recognising the transformational effect for Scotland’s families, ensuring that children have access to the highest quality learning and care, and providing significant savings to parents and carers.

“Despite the massive challenges of the COVID-19 pandemic, particularly on infrastructure projects and our recruitment programmes, all councils are delivering more that the current 600 hours entitlement to some or all families.

“We are pleased that we have jointly agreed a new date of August 2021 for the reinstatement of the statutory duty for 1140 hours. We look forward to working with all our partners, including the Scottish Government, to ensure Scotland’s children and families can benefit from almost doubling funded hours of ELC and to support the recovery from the impact of coronavirus on our communities.”

Latest data from the Improvement Service, compiled in August, shows that more than 56,000 children (61% of those receiving funded ELC) are already receiving 1,140 hours, despite the statutory expansion being paused in April to give local authorities the flexibility to focus on responding to the COVID-19 pandemic.