Tag: Bank of Scotland

Scottish Firms’ confidence rises but remains near record low

Bank of Scotland’s Business Barometer for May 2020 shows: 

  • Overall confidence for firms in Scotland rose 17 points in the past month to -33%
  • Firms’ confidence in their own business prospects was -26%, compared with -29% in April
  • Growing number of firms experienced an increase in demand for goods and services

Business confidence in Scotland rose 17 points during May to -33%, remaining near record lows, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

Companies in Scotland reported higher confidence in their own business prospects than in April at -26%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -33%.

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

In an illustration of the impact COVID-19 is having on Scotland’s business, the majority of firms continued to see demand negatively affected during May, but with the picture improving slightly since April.

65% experienced a fall in demand for their products and services, down seven points on the month before. Meanwhile, 12% experienced an increase in demand, up on 5% in April.

The number of Scottish firms operating at less than 50% capacity increased 18 points to 43%. A fifth of firms (20%) weren’t operating at all, down from 32% in April.

Of the 75% of businesses reporting disruption to their supply chain during May, 19% expected the situation to improve within three months, while 14% expected it would take more than 12 months to return to normal levels.

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “Scottish firms have been hit hard by this crisis, but they’re showing resilience in the face of great challenge.

“It’s encouraging to see that some businesses are beginning to reopen as demand creeps back. We’re standing shoulder-to-shoulder with companies from all sectors to help them overcome the challenges presented during this difficult time.”

National overview

Across the UK, business confidence held steady month-on-month, dipping just one point to   -33%. The North East and London both saw confidence rise month-on-month, scoring the joint-highest confidence reading at -20%. The South West recorded lowest confidence at         -51%, compared to -35% the month prior.

From a regional perspective, despite all being in negative sentiment, six of the 12 regions reported a higher confidence in May. The North East was the least negative region at -20%. The South West was the most negative region at -51% followed by the South East at -45%.

In May, the construction sector saw the sharpest decline, falling 24 percentage points to -44%. However, all the three other major sectors saw a modest increase. The retail sector increased eight points to -25%, while manufacturing rose to -27% and services saw a small increase of four points to -18%.

Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, said: “While May continued to show the unprecedented impact of the shutdown for businesses across the UK, it is important to see that now half of all regions are climbing back from the lowest levels seen last month.

“As Britain sees further easing of measures in the coming weeks, with more businesses re-opening, it is hoped that this will further improve businesses’ confidence. Government schemes and finance options continue to be made readily available to businesses so that they can be best placed and prepared to open once again in the months ahead.”

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “Despite the results partly capturing the period since the Government’s announcement of an initial easing of restrictions, trading conditions remain difficult for most firms.

“Nevertheless, a further relaxation of constraints will enable more businesses to resume their activities.”

CBIL boost helps recycling business support gardeners in lockdown

  • Bank of Scotland supports green waste recycling firm with six-figure CBILS loan
  • Forth Resource Management triples online compost and topsoil delivery sales as more people spend time in their gardens
  • Working capital injection comes as local authority clients stop garden waste collections and close local recycling centres 

An East Lothian recycling business has seen its online sales more than triple and has stepped up its local delivery service with the support of Bank of Scotland. It is believed that the jump in sales is partly as a result COVID-19, with more people spending time at home and in their garden.

Forth Resource Management recycles more than 100,000 tonnes of organic waste for local councils and landscapers across Scotland each year, retailing subsequent product direct to local residents, builders merchants, garden centres and farmers.

With the UK now on lockdown, the business has increased the output of its online retail offer, supported by a six-figure loan from Bank of Scotland as part of the government-backed Coronavirus Business Interruption Loan Scheme.

The funding comes as a number of Forth Resource Management’s key local authority clients have stopped their garden waste collection services and closed their local recycling centres.

While the business has ultimately had to furlough a small number of its employees, the booming online delivery service – alongside the working capital injection from the bank – is expected to stand it in good stead for when normal trading resumes.

Tommy Dale, managing director at Forth Resource Management, said: “Local authority contracts have always been a key revenue pillar within our company but we’re fortunate that the nature of our business means we can adjust our focus and meet growing need elsewhere.

“Gardening and time spent outdoors is offering valuable respite up and down the country so it’s nice to know we’re positively contributing to keeping spirits up.

“The speed at which Bank of Scotland provided the funding has given us a great deal of confidence to trade through this challenging period and line up investment for growth in more certain times.”

Daniel Burns, relationship manager at Bank of Scotland, said: “Plotting a path against current headwinds is a challenge for almost every business at present.

“As such, we’re committed to being by the side of companies like Forth Resource Management – working with government to enable them to adapt their operations for the short-term.”

Garden centre stays in bloom through coronavirus crisis

A local garden centre and tearoom is brightening up lockdown for its customers by offering a delivery service during the Coronavirus crisis, thanks to CBILS support from Bank of Scotland.

New Hopetoun Gardens in Broxburn was forced to close its doors to the public and furlough 28 of its 36 staff following the government’s announcement of a UK-wide lockdown.

The centre features 18 individually themed gardens and offers the largest range of plants for sale in Scotland, a tearoom and an award-winning gift shop.

April and May are the business’ busiest months with at least 10,000 people visiting each month to buy gardening essentials including potted plants, shrubs and pots.

Due to the current crisis, restrictions placed on the general public to avoid non-essential travel and purchases means the business can no longer rely on its usual income from customer visits.

In order to continue paying suppliers, provide care for the plants and deliver orders to customers during this unprecedented time, the business approached Bank of Scotland for support.

Within two weeks, New Hopetoun Gardens received a £195,000 CBIL funding package to assist with operations and an additional £110,000 CBIL earmarked for the end of the year should the lockdown continue beyond May.

Morag Macrae, joint owner of Hopetoun Gardens, said: “This should be our busiest time of year, but people simply aren’t allowed to visit us. To overcome this challenge, we’re focusing on home deliveries and currently send 15 orders a day to customers across Edinburgh.

“When the lockdown was announced we went through a lot of scenario planning. The deliveries do bring in a small amount of income, but we knew we’d need further support to pay our suppliers. We have a long-standing relationship with Bank of Scotland and thanks to the funding, we’re able to keep seven members of staff on board to deliver the plants and take care of the stock we still have.

“The support also gives us the flexibility required to make it through the quieter winter months. I hope our deliveries will continue to provide a bit of solace for our customers and brighten up what is a difficult time for all.”

Stuart McNaughton, relationship manager at Bank of Scotland, said: “With the general public unable to leave their homes unless absolutely necessary, a lot of businesses that rely on customer footfall are experiencing large decreases in income.

“For some however, there are alternatives. New Hopetoun Gardens is a great example of a business that is adapting and working to safely deliver plants to their customers.

“At Bank of Scotland we’re committed to supporting businesses as they navigate these challenging times.”

March sees sharp fall in Scottish business confidence

Bank of Scotland’s Business Barometer for March 2020 shows:

  • Overall confidence for firms in Scotland fell 22 points in the past month to -7%
  • Firms’ confidence in their own business prospects was -4%, compared with 14% in February
  • Research undertaken between 2nd and 16th March shows a sharper fall in confidence nationally during second week of the survey at -3%, among the lowest figures seen since the financial crisis

Business confidence in Scotland fell 22 points during March to -7%, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

The research, taken between the 2nd and 16th March, showed that companies in the region had lower confidence in their business prospects at -4%. When taken alongside their views of the economy overall, this gives an overall confidence of -7%.

Across the UK, overall business confidence fell by 17 percentage points to 6% in March, the lowest level since October 2019.

However, the report showed that nationally, for the second week of the survey, a much sharper fall in overall confidence was recorded at -3%. It matches the lowest dip seen by the barometer since December 2011 and is otherwise the lowest dip since March 2009 during the global financial crisis.

Responding specifically to the impact of the Coronavirus, 66% of Scotland businesses stated that they had already been affected or expected to be impacted, ahead of Boris Johnson’s initial call for the public to stay at home on March 16th. The data illustrates the impact that the outbreak was having on business confidence before many initiatives launched by the Government to help combat the virus were announced.

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

Fraser Sime, regional director for Scotland at Bank of Scotland, said: “It’s impossible to accurately predict how COVID-19 will impact the Scottish economy, so it’s not surprising to see the confidence of Scottish businesses taking a dip as the pandemic evolves.

“The First Minister has called for a partnership to get through this period where the public sector, trade unions, businesses and third sector organisations work together to support Scotland’s workforce. We’re also working by the side of businesses and the government to help firms adapt and adjust as we navigate through this unprecedented period.

“At Bank of Scotland, we’ve committed to lend up to £18bn to businesses this year and have set aside £2bn of arrangement fee free finance to help those directly impacted by COVID-19. From tourism and hospitality to manufacturing, this support is available now. And we will continue to guide and help businesses across all sectors through any interruptions they may face.”

Businesses in the North East had the highest confidence at 23%, ahead of the South West at 16%, and London at 12%.

Those in the South East were the least confident, with an overall confidence of -10%, 16 points below the national average.

Sector overview

In March, overall business confidence fell across all four sectors surveyed. Confidence in the retail sector saw the sharpest decline, falling 21 percentage points to 9%. The manufacturing sector also saw a big decline from 31% to 11%, services was down 18 points to 1%, while the construction sector fell by 15 points to 14%.

Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, said: “There is now little doubt that businesses across the board are feeling the impact of COVID-19. 

“Many businesses have already had to pause their work and others are trying to adapt to new ways of working.

While all sectors have displayed a real dip in confidence, it is important that businesses take the support that is available to them to help them through this unprecedented and uncertain time. We remain committed to supporting our customers in the weeks and months ahead in any way we can.”

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “The results in March demonstrate the impact of the shutdown of large swathes of the economy to combat the pandemic even in advance of the Government’s stringent measures announced in recent days.

“Sentiment has returned to historic low levels after improving in recent months. We will continue to monitor what businesses are telling us, and hope that they can take steps to minimise the impact of current economic downturn.”

Rock bottom: Business confidence takes a battering

Bank of Scotland’s Business Barometer for July 2019 shows:

  • Overall confidence for firms in Scotland fell 17 points in the past month to zero per cent
  • Firms’ confidence in their own business prospects was six per cent, compared with 32 per cent in June

Continue reading Rock bottom: Business confidence takes a battering

Brexit, what Brexit?: Scottish business confidence continues to grow, says Bank of Scotland

Bank of Scotland’s Business Barometer for February 2019 shows:

  • Overall confidence for firms in Scotland rose four points in the past month to five per cent
  • Firms’ confidence in their own business prospects was 17 per cent, compared with three per cent in January

Continue reading Brexit, what Brexit?: Scottish business confidence continues to grow, says Bank of Scotland

Scottish business confidence on the rise?

Bank of Scotland’s Business Barometer for November 2018 shows: 

  • Overall confidence for firms in Scotland rose seven points in the past month to 11 per cent
  • Firms’ confidence in their own business prospects was 22 per cent, compared with 18 per cent a month ago
  • But businesses were evenly split on the economy overall, with as many describing themselves as pessimistic as were optimistic

Business confidence in Scotland rose seven points during November to 11 per cent, according to the latest Business Barometer from Bank of Scotland. Continue reading Scottish business confidence on the rise?

Business confidence remains steady in August

Bank of Scotland’s Business Barometer for August 2018 shows:

  • Overall confidence for firms in Scotland remained steady at 17 per cent for second month in a row
  • Economic optimism stood at nine per cent, seven points above last month
  • Firms’ confidence in their own business prospects was 25 per cent, compared with 31 per cent in July

Business confidence in Scotland remained steady at 17 per cent during August, according to the latest Business Barometer from Bank of Scotland.

Companies reported lower confidence in their own business prospects, which fell six points to 25 per cent, but saw a seven point increase in economic optimism to nine per cent.

Companies’ hiring intentions showed a net balance of six per cent of businesses in Scotland expect to hire more staff during the next year. However, this is down seven points on last month.

Across Scotland, a net balance of 19 per cent 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, up one point on a month ago.

Across the UK, overall confidence fell seven points to 23 per cent as firms’ optimism about the economy dropped eight points to 17 per cent. Firms’ confidence in their own business prospects dropped five points to 29 per cent.

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

Fraser Sime, regional director for Scotland at Bank of Scotland, said: “To see overall confidence holding firm demonstrates the continued resilience of Scottish businesses during uncertain times.

“In an evolving economic and political environment, firms should continue to seek trusted advice and optimise working capital. This will ensure they are well positioned to deal with potential challenges and capitalise on opportunities in order to maximise their full growth potential and play a part in helping Scotland prosper.”

UK regional picture 

Businesses in London and the West Midlands showed the most confidence, both at 37 per cent, ahead of the North West (35 per cent).

Those in the South East were the least confident, with an overall confidence of just eight per cent, 15 points below the national average. 

Sectors

From a sector perspective, firms in the manufacturing sector remained most confident at 38 per cent, but confidence of construction businesses fell sharply by ‑12 points to 36 per cent, closely followed by consumer services (‑6 points to 22 per cent) and other services (‑6 points to 18 per cent).

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking commented: 
“Business confidence was resilient in the first half of the year, but has eased back recently. This reflects changes in perceptions of Brexit risks, which underscores the importance of current EU-UK negotiations.”