Tag: Business Barometer

Scottish business confidence dips in December

– BoS business barometer –

  • Business confidence in Scotland fell ten points during December to 31%
  • Companies in Scotland reported lower confidence in their own business prospects month-on-month, down seven points at 44%
  • Overall UK business confidence decreased seven points in December to 35% with firms’ outlook on the economy also down by eleven points

Business confidence in Scotland fell ten points during December to 31%, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

Companies in Scotland reported lower confidence in their own business prospects month-on-month, down seven points at 44%. When taken alongside their optimism in the economy, down 14 points to 18%, this gives a headline confidence reading of 31%.

Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (39%), investing in their team (37%), and entering new markets (24%).

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

A net balance of 30% of businesses in Scotland expect to increase staff levels over the next year, up five points on last month.

National picture

Overall UK business confidence fell two points in December to 35%, the first decrease since August, driven largely by firms’ outlook on the overall UK economy which dipped by eleven points from 38% to 27%. Businesses’ optimism in their own trading prospects also decreased, but less markedly so – by five points to 43%.

Companies’ hiring intentions also dropped slightly with 29% of firms intending to increase staff levels over the next 12 months, down six points month-on-month.

Firms in West and East Midlands were the only regions to report an increase in confidence, up one point to 33% and up five points to 34% respectively. The North East was most confident, remaining at 48% for the second consecutive month, followed by the East of England (45%), London (38%) and the South West (36%).

Firms in the services industry reported a significant decrease in confidence, down 16 points to 30%, due to moderation in both trading prospects and economic optimism. Manufacturing confidence also eased back (38%, down seven points). However, retail and construction both bucked the trend with rises to 44% (up two points) and 37% (up two points) respectively.

Martyn Kendrick, regional director for Scotland at Bank of Scotland Commercial Banking, said: “While we’ve seen a dip in confidence from businesses in Scotland, we’re still seeing strong figures at 31%, just four points below the national average.

“With the festive season keeping many businesses busy, it’s encouraging to see them thinking positively about the year ahead with trading prospects one point higher than the UK average.

“For those planning to invest in their teams and evolve their offer, now is a perfect time to think about cash flow to ensure they enter the new year on steady footing, ready to capitalise on new upcoming opportunities. We’ll continue to be by the side of businesses throughout 2024 and beyond to help them prosper.”

Paul Gordon, managing director for SME and Mid Corporates at Lloyds Bank Commercial Banking, said: “After some strong performances in November, a number of sectors have declined this month including services and manufacturing.

“However, both are still higher and stronger than a year ago. Retail and construction firms are both marginally more confident this month and significantly more so than in December 2022.

“Despite the falling confidence figures for this month, we can be comforted that businesses have been resilient during a year of challenging economic conditions and continue to be positive about the future.

“However, as recent ONS GDP data has shown, the UK near-term economic outlook remains tough and that will no doubt have an impact on consumer and business behaviour alike.

“If businesses take time to look at their financial stability now to ensure cash-flow remains a priority, as well as planning ahead their staffing levels and requirements, that should put them in good stead to both manage headwinds and seize opportunities in 2024.”

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “This December data was collected following several key announcements, including energy prices rises and the UK economic outlook being revised down in the Autumn Statement. All of this will undoubtedly have had an impact on business confidence as we head into 2024.

“Businesses are also balancing cost pressures with a challenging labour market that will see increases to minimum wage in April 2024, as perhaps indicated in the wage growth figures, at a time when they are managing staff retention and recruitment decisions.

“However, over the course of the year confidence has steadily increased from an average confidence of 25% in the first three-months of 2023 and ending the year with a three month average of 39% – an indication of the positive trajectory business has seen this year. This provides a healthier position to begin 2024 with, compared to 2023.”

Business confidence dips in Scotland – Bank of Scotland Business Barometer

SCOTTISH BUSINESSES REPORT RISE IN ECONOMIC OPTIMISTISM

  • Business confidence in Scotland fell three points during September to 33%, but remains above the year-to-date average of 30%
  • Firms’ optimism in the economy rose 10 points to 29% as Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (40%), entering new markets (39%) and investing in their team (30%)
  • Overall UK business confidence dipped five points in September from 41% to 36%, with firms’ outlook on future trading prospects down marginally on last month’s reading of 46% to 41%

Business confidence in Scotland fell three points during September to 33%, but remains above the year-to-date average of 30%, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

Companies in Scotland reported lower confidence in their own business prospects month-on-month, down 14 points at 39%. When taken alongside their optimism in the economy, up 10 points to 29%, this gives a headline confidence reading of 33%.

Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (40%), entering new markets (39%) and investing in their team (30%).

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

A net balance of 31% of businesses in the region expect to increase staff levels over the next year, up seven points on last month.

National picture

Overall UK business confidence fell five points in September from 41% to 36%. Firms’ outlook on their own trading prospects remained strong at 41% despite a five-point drop on last month, and their optimism in the UK economy also remained robust at 30%, down by seven points on August’s reading.

Businesses hiring intentions remained upbeat with 26% of firms reporting plans to increase their staff levels over the next year, down five points on last month.

Companies in London reported the highest levels of business confidence for the second consecutive month at 44% (down eight points month-on-month). Firms in Yorkshire reported the second highest reading at 40% (up eight points month-on-month), followed by those in the North West at 38% (up four points month on month).

The fall in business confidence this month centred around the retail and services sectors, following strong sentiment in August. Retail confidence fell to 32% (down 12 points) dragged down in particular by trading prospects, while services confidence declined to 36% (down eight points). Construction confidence also fell to 36% (down eight points). However, manufacturing was stronger, with confidence rising to a three month high of 36% (up six points).

Chris Lawrie, regional director for Scotland at Bank of Scotland Commercial Banking, said: “Despite a small dip this month business confidence in Scotland remains positive, with many firms seeking opportunities to grow by expanding their teams and investing in new markets.

“As we move into the winter months, those operating in the hospitality, retail and leisure sectors should be planning carefully for any increase in Christmas trade and getting ready to capitalise on opportunities as they arise. We’ll remain firmly by the side of businesses to support their ambitions and offer the tailored funding needed to thrive.”

Paul Gordon, managing director for SME and Mid Corporates at Lloyds Bank Commercial Banking, said: “As part of the Barometer survey data, we asked firms what represents the biggest issue for the UK Economy. The overwhelming answer from businesses this month was a combination of inflation, interest rates and energy prices.

“With recent data from various organisations in August showing inflationary measures having their desired effect, including our own UK Sector Tracker which showed demand falling across most sectors, the coming months may see a more stable environment where prices are concerned.

“Energy prices, from the wholesale market, have decreased and while businesses are not eligible for the same consumer price cap, most businesses will have longer term agreements with energy suppliers that shelter them somewhat from short term volatility. However, as we move into winter, it would be prudent for businesses to review their utility contracts and see if there are savings to be made.”

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “While the gains in business confidence we saw in August have not been maintained, it’s important to see the wider trend clearly reflected in the data which paints a very different picture to this time 12 months ago, when the economy was in significant difficulties.

“Despite some month-to-month movements, if you look at the year in quarterly time periods, confidence has steadily risen from 20% in the first quarter, 26% in the second and now an average of 27% in the third.

“Although the economic environment remains uncertain with inflation and interest rate pressures playing their part, the recent decision by the Bank of England to leave interest rates unchanged is likely to help businesses feel more upbeat about the future, which may underpin confidence in the last three months of the year.”

Business confidence rises in Scotland

Bank of Scotland Business Barometer

  • Business confidence in Scotland rose four points in August to 36%
  • Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 12 points at 53%
  • In August, overall UK business confidence reached its highest level since February 2022, increasing 10 points on July’s reading to 41%

Business confidence in Scotland rose four points during August to 36%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 12 points at 53%. When taken alongside their optimism in the economy, down two points to 19%, this gives a headline confidence reading of 36%.

Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (47%), investing in their team (39%) and entering new markets (31%).

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

A net balance of 24% of businesses in the region expect to increase staff levels over the next year, down five points on last month.

National picture

Overall UK business confidence increased to its highest level since February last year, jumping 10 points to 41% in August. All 11 regions and nations reported a positive business confidence reading in August, with nine regions and nations reporting a higher confidence reading month-on-month.

Optimism in the UK economy also increased in August by 16 points to 37%, and the number of businesses expecting an increase in their trading prospects rose by three points to 46%.

Businesses in London reported the highest levels of business confidence at 52% (up 20 points month-on-month), its strongest reading in 14 months. Firms in the South East reported the second highest reading at 47% (up 17 points month-on-month), followed by those in the South West at 46% (up 12 points month on month).

The construction, retail and service sectors all saw a rise in business confidence in August. Services gained 12 points to reach a 22-month high of 42%, while retail firms were up nine points to 44%, an 18-month high.

Construction firms’ confidence also increased by 11 points to a four-month high of 42%. In contrast, manufacturing confidence fell for a second consecutive month with a 4-point decline to 30%, taking it to the lowest level since April 2023.

Chris Lawrie, area director for Scotland at Bank of Scotland, said: “It’s great to see confidence amongst Scottish firms climb this month and to see so many looking at avenues for growth. Businesses that invest now in new opportunities will stand themselves in good stead for the years to come.

“However, there are challenges, particularly with continued high prices which many firms are finding difficult to navigate. This makes it the perfect time for businesses to review their working capital and ensure they have the money they need to invest in opportunities as they arise.

“We’ll reman by the side of Scottish firms, providing them with the tools and support they need.”

Paul Gordon, managing director for SME and Mid Corporates at Lloyds Bank Commercial Banking, said: “We’ve seen a strong rebound in confidence, now higher than at any time since the Russian invasion of Ukraine and well above the long-run average. Business optimism is helped by the outlook on peak interest rates and the direction of travel on inflation.

“However, this month we are seeing a clear difference in confidence levels between large and smaller firms. Larger firms are continuing to feel the headwinds of the overall macroeconomic climate, while smaller firms, which are more likely to trade locally, are benefiting from the counter-inflationary measures and relative economic stability.

“We are here to support businesses of all sizes and can offer expertise not just for those who trade in the UK, but internationally as well.

“Manufacturing confidence in the UK has fallen this month once again, reflecting the overall challenges for the sector in most major economies. Some manufacturing businesses continue to experience challenges with recruitment, resulting in upward pressure on wages. The Bank of England will need to consider carefully in its next decision for interest rates.”

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “The bounce in economic optimism this month is the standout point. Our analysis shows that businesses felt relief that interest rates may be reaching their peak, alongside hopes that measures to tackle inflation are having an impact.

“With trading prospects remaining stable, and hiring and wage intentions also rising, the macro environment for small businesses and those outside the manufacturing sector is more upbeat.

“From the data, large firms and manufacturers are experiencing some degree of caution, which is likely to reflect the wider global economic environment and, for manufacturing, the rotation of spending towards services.”

Scottish business confidence dips but remains positive

Bank of Scotland business barometer – July

  •   Business confidence in Scotland fell 18 points during July to 32%
  • Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (44%), investing in their team (38%) and entering new markets (33%).  
  • Overall, UK business confidence dipped six points to 31%, with nine out of 11 regions and nations reporting a lower confidence level month-on-month

Business confidence in Scotland fell 18 points during July to 32%, according to the latest Business Barometer from Lloyds Bank Commercial Banking. 

Companies in Scotland reported lower confidence in their own business prospects month-on-month, down 11 points at 41%.  When taken alongside their optimism in the economy, down 27 points to 21%, this gives a headline confidence reading of 32%.  

Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (44%), investing in their team (38%) and entering new markets (33%).  
 
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. 
 
A net balance of 29% of businesses in the region expect to increase staff levels over the next year, down 20 points on last month. 

National picture

Overall, UK business confidence dipped by six points to 31% in July, with nine out of 11 regions and nations reporting a lower confidence reading month-on-month.

Optimism in the economy has also fallen, dropping 11 points to 21%, the lowest levels since February this year.

However, firms remained resilient in their own trading prospects, with 43% of companies expecting business activity to increase over the next 12 months, up one point on last month and reaching a 14-month high.

Despite the fall in overall confidence, levels remain higher than the survey’s long-term average reading of 28% and every UK region and nation reported a positive confidence reading in July.

The North East reported the highest levels of business confidence at 43% (down four points on last month), followed by Yorkshire (down seven points month-on-month) and the West Midlands (up two points month-on-month) both at 38%.

Retail was the only broad sector registering higher confidence (up six points to 35%), mostly reflecting stronger transport services.

The fall in overall business confidence this month was led by the service sector sentiment falling by seven points to 30%. While the fall in confidence was seen broadly across this sector, hospitality firms appeared to be more resilient.

Confidence also was lower in manufacturing (down 16 points to 34%) and construction (down eight points to 31%).

Chris Lawrie, area director for Scotland at Bank of Scotland Commercial Banking, said: “While business confidence may be down this month, it’s brilliant to see that it’s still in positive territory, proof of the resilience of Scottish businesses who are managing headwinds including persistent high inflation.

“Despite the ongoing challenges, those in the country’s hospitality and leisure industry will be reaping the rewards from the uplift in tourism this summer, and those around Edinburgh will be preparing for the Fringe Festival in the hope of a welcome boost in trade.

“With another bank holiday on the horizon, firms will need to manage their working capital closely to ensure they are ready for peaks in demand, and ready to take advantage of any opportunities that arise.”

Paul Gordon, managing director for SME and Mid Corporates at Lloyds Bank Commercial Banking, said: “It’s not surprising that the challenging economic environment is continuing to weigh heavily on businesses and reduce their overall confidence. However, the resilience in their trading prospects, pricing and wage expectations is more encouraging.

“Increased spending in the retail sector is clearly having a positive impact and as we look ahead into the second half of the year, I am sure that businesses will be starting to gear up for the months ahead and ultimately to the busy Christmas season.

“Managing costs, staffing and inventory during this time is crucial to savvy financial planning, and business should not hesitate to reach out for business support should they require it.”

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “The Barometer presents a complex picture for firms this month, with the data showing that trading prospects remain strong with businesses feeling under less pressure by inflation to raise prices.

“However, there is clearly uncertainty about the wider economy and rising interest rates. This may be causing net hiring intentions to moderate slightly. Nevertheless, wages and jobs growth continue to support staff with the current cost of living. 

“However, the sectoral analysis this month shows some positive signs for the retail sector, while there are indications that pent-up demand may be boosting confidence in tourism and travel. As businesses continue to adapt to the economic environment, we expect to see ongoing resilience broadly across all sectors.”

Bank of Scotland Business Barometer: Scottish business confidence leaps in June

SCOTTISH BUSINESS CONFIDENCE LEAPS IN JUNE

  • Business confidence in Scotland rose 28 points during June to 50%
  • Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (41%), investing in their team, and entering new markets (both 34%)
  • Overall, UK business confidence rose nine points to 37%, with all regions reporting a positive confidence reading

Business confidence in Scotland rose 28 points during the beginning of June to 50%, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 22 points at 52%. When taken alongside their optimism in the economy, up 34 points to 48%, this gives a headline confidence reading of 50%.

Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (41%), investing in their team, and entering new markets (both 34%).

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

A net balance of 49% of businesses in the region expect to increase staff levels over the next year, up 20 points on last month.

National picture

Overall, UK business confidence increased by nine points to 37% in June, with all regions reporting a positive confidence reading. Eight out of 10 regions reported a higher confidence reading than in May.

The East Midlands reported the highest levels of business confidence at 52% (up 35 points on last month), the highest level of any UK region or nation this year.

Scotland reported the second highest confidence reading, followed by the North East at 47% (up 12 points month-on-month) and Yorkshire at 45% (up 26 points month-on-month). London and the South West were the only regions to report a decline in confidence. In London confidence fell by 10 points to 33%, while in the South West it fell by one point to 29%.

Business confidence for firms in the service sector rose to 37% (up 11 points), the highest seen since February 2022. With the recent spell of good weather and a reduction in food and energy prices, businesses in leisure and hospitality may be able reap the rewards in the months to come.

Manufacturing firms’ confidence also increased to its highest level since early 2022, rising to 50% (up 10 points) to outperform other sectors.

Chris Lawrie, area director for Scotland at Bank of Scotland Commercial Banking, said: “It’s great to see confidence among Scottish firms on the rise. Many businesses will be looking forward to a busy summer period, especially with large events like the Edinburgh Fringe on the horizon which will no doubt bring excellent trading opportunities for the hospitality and leisure industry.

“It’s encouraging to see leadership teams looking to evolve their offering and making plans to invest in their colleagues too. This should go hand in hand with carefully managed working capital to ensure that businesses have the financial headroom to go after the growth opportunities that come their way.”

Paul Gordon, managing director for SME and Mid Corporates at Lloyds Bank Commercial Banking, said: “The boost in confidence and hiring intentions is a welcome sign that businesses are managing well in what continues to be a challenging environment.

“It’s particularly pleasing to see that for both services and manufacturing, two sectors which have been hardest hit in recent years, there is real optimism for trading prospects and growth. However, wage pressures continue to be above pre-pandemic levels and firms need to be mindful of this and ensure that costs are evenly distributed and managed closely.”

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “It’s encouraging to see business confidence rebounding following last month’s five-point dip to 28%. Trading prospects and optimism have seen a resurgence this month with overall confidence up in all but two of the twelve regions of the UK, which shows positive prospects across the wider economy.

“However, interest rate rises and cost pressures are still felt by many and we await to see the impact of the latest 50 basis point rise in the base rate. Meanwhile, expectations for average pay growth, although down slightly this month, appear to have picked up compared with the start of the year and remain elevated relative to pre-pandemic levels.”

Bank of Scotland Business Barometer: Business confidence continues to rise

Lloyds Bank’s Business Barometer for March 2023 shows:

  • Business confidence in Scotland rose 24 points during March to 38%
  • Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 34 points at 41%
  • Overall UK business confidence in March reached its highest level since May last year, with eight out of 11 regions and nations reporting higher levels of confidence than February  

Business confidence in Scotland rose 24 points during March to 38%, according to the latest Business Barometer from Bank of Scotland Commercial Banking – conducted between the 1st – 15th March ahead of the Chancellor’s Spring Budget on Wednesday 15th March.

Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 34 points at 41%.  When taken alongside their optimism in the economy, up 15 points to 35% this gives a headline confidence reading of 38%.

Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (37%), entering new markets (35%) and investing in sustainability (30%).

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

A net balance of 33% of businesses in the region expect to increase staff levels over the next year, up 34 points on last month.

Overall UK business confidence climbed 11 points to 32% in March, with firms reporting their highest confidence levels since May last year. 

On average, firms felt positive about their own trading prospects with 39% of firms expecting business activity to increase in the next 12 months, up eight points on last month and 25% said they would increase staff levels by this time next year, up five points month-on-month.

Every UK region and nation had a positive confidence reading in March, with eight out of 11 regions recording a month-on-month increase in confidence.

For the second month in a row the West Midlands reported the highest levels of business confidence at 48% (unchanged month-on-month), followed by Scotland (up 24 points), London (up 20 points), and the North East (up two points) all at 38%. 

Chris Lawrie, area director for Scotland at Lloyds Bank Commercial Banking, said: “Scottish businesses are feeling confident about the months ahead and It’s great to see firms’ optimism in the overall economy is at its highest level since May 2022.

“With the winter months behind us, firms will likely be preparing for the brighter – and often busier – summer period. Businesses that keep a close eye on cash flow and manage their working capital will be best placed to capitalise on opportunities. We’ll continue to be by the side of Scottish businesses to help steer them through what we hope will be a strong spring and summer season.”

There was a broad rise in business confidence across the sectors, particularly in construction (47% up 28 points) and manufacturing (37% up ten points) both at a ten-month high and retail (32% up 11 points) the highest since February 2022.

Paul Gordon, Managing Director for Relationship Management, Lloyds Bank Business & Commercial Banking, said: “It’s great to see economic optimism as well as trading prospects at a ten-month high.

“We can see from the data that this could well be down to a combination of a less obstructive hiring environment and the longer-term wage pressures trending downwards. 

“As we look ahead, growth and investment must be the watch words for businesses across all sectors. This will help build future resilience against an uncertain economic landscape.”

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “Business confidence has seen a surge this month with economic optimism and trading prospects bolstering firms.

“With hiring intentions improving, we may see employment growth picking up in the coming months. Tentative signs of easing wage pressures suggest that businesses’ difficulties in finding staff may have started to ease.

“Although the measures in the Budget were widely trailed, it is yet to be seen what the full impact of the Chancellor’s announcement, along with the surprise rise in inflation and recent increase in interest rates, will have had on business confidence.”

Uptick in Scottish business confidence

Bank of Scotland Business Barometer

  • Business confidence in Scotland rose four points during February to 14%
  • Scottish businesses identified their top target areas for growth in the next six months as hiring new employees (43%), introducing new technology (31%) and evolving their offer (30%)
  • Overall, UK business confidence remained positive in February at 21% and 31% of firms reported feeling positive about their own trading prospects for the year ahead

Business confidence in Scotland rose four points during February to 14%, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

Companies in Scotland reported lower confidence in their own business prospects month-on-month, down one point at 7%.  When taken alongside their optimism in the economy, up eight points to 20%, this gives a headline confidence reading of 14%. 

Scottish businesses identified their top target areas for growth in the next six months as investing in their team (43%), introducing new technology (31%) and evolving their offer (30%).

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

A net balance of 1% of businesses in the region expect to reduce staff levels over the next year, down 15 points from January when a net balance of 14% of businesses planned to create new jobs.

Overall UK business confidence decreased by just one point to 21% in February. Firms remained positive about their own trading prospects with a net balance of 31% expecting business activity to increase in the coming 12 months.

Firms also reported plans to create new jobs with 20% of businesses intending to make new hires over the next 12 months – up three points from January.

All UK regions and nations reported a positive confidence reading in February, with six areas reporting a month-on-month increase in confidence. Of those, the West Midlands (up 30 points to 48%) and Yorkshire and Humber (up 22 points to 34%) saw the largest monthly increases.

Chris Lawrie, area director for Scotland at Lloyds Bank Commercial Banking, said: “After a dip in confidence in January, it is good to see that businesses are once again feeling optimistic about their own trading prospects and the wider economy.

“However, rising costs, supply chain challenges and skills shortages are still affecting several key sectors across the country. As firms grapple with these challenges it’s easy for attention to pull away from seizing opportunities for growth.

“Firms that keep a close eye on cash flow and manage their working capital will be best placed to take on any unforeseen challenges and go after prospects in the months ahead.”

Retail confidence bounced back, rising for the first time in three months to 21% (up 14 points), led by improvements in both trading prospects and economic optimism. However, business confidence fell in construction (down eight points to 19%) and services (down five points to 20%) although this remains higher than in the latter part of 2022.

Scotland only: Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, said:  “While overall confidence has dipped slightly, it’s encouraging to see businesses backing their own trading prospects. This may well be down to the easing of cost pressures as we see the prices of commodities such as oil and energy coming down. At the same time, with pay expectations easing, this may be giving businesses the boost they need to weather the rest of the year.”

“As we move further into 2023, focusing on growth and investment should be key for businesses across the sectors, while ensuring that margins and cash flow are also prioritised.”

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Business confidence has lost a little momentum this month, following the strong gains seen recently. Firms are feeling more cautious about the wider economy. However, confidence in their own trading prospects continues to strengthen, helped by tentative signs that wage and other cost pressures may be reducing.

“While inflation appears to be tapering, pressures on consumers will need to ease further to help make it a more stable environment for businesses to operate.”

Scottish business confidence falls but remains in positive territory

Bank of Scotland’s Business Barometer for December 2022 shows:  

  • Business confidence in Scotland fell nine points during December to 15%
  • Scottish businesses identify top growth opportunities as evolving their offer (36%), investing in their teams (31%) and entering new markets (25%)
  • Overall UK business confidence rose seven points during the last month to 17%, with eight out of 11 nations and regions reporting a higher reading than November


Business confidence in Scotland fell nine points during December to 15%, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

Companies in Scotland reported lower confidence in their own business prospects month-on-month, down five points at 25%.  When taken alongside their optimism in the economy, down 10 points to 6% this gives a headline confidence reading of 15%. 

Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (36%), investing in their teams (31%) and entering new markets (25%).

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

A net balance of 11% of businesses in the region expect to increase staff levels over the next year, up three points on last month.

Overall UK business confidence rose seven points during December to 17%. The proportion of businesses that felt positive about the wider economy was up 10 points month-on-month to 8%, while their outlook on their own future trading prospects increased by two points to 27%. Businesses also remained optimistic about job creation, with 16% of firms planning to hire more staff in the next 12 months – up two points on November.

All UK regions and nations reported a positive confidence reading in December, for the first time since July, with eight out of 11 recording a month-on-month increase in confidence. Of those, the North West (up 31 points to 40%), North East (up 24 points to 34%) and South East (up 23 points to 14%) saw the largest monthly increases, with the North West now the most optimistic overall.

Chris Lawrie, area director for Scotland at Bank of Scotland Commercial Banking, said: “Although business confidence has dipped it’s encouraging to see it remain in positive territory, which is testament to the resilience of the business community here in Scotland.

“After a turbulent few months many companies are now looking at shoring up their investment plans for the year ahead. Those planning to invest in their teams and export into new markets will do well to keep a close eye on cash flow to ensure they’re ready to capitalise on opportunities as they arise.”

The manufacturing sector reversed a six-month trend of falling confidence, with a nine-point rise to 13%. Confidence in construction and services also increased by nine points to 29% and 18% respectively. However, retail confidence fell slightly, by two points to 13%.  

Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, said: “It’s encouraging to see the confidence of most regions and nations rallying as we end the year. This has been a tough time for businesses with rising costs and much uncertainty, but some firms are becoming more confident as we head in to 2023. 

“While wage expectations start to temper, prices continue to rise and keeping a close watch on cash flow remains a priority for businesses, no matter what industry you operate in. For those who are in need of support or are looking for advice, especially into the festive season and new year, at Lloyds Bank we are by your side in times of uncertainty.”

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Business confidence has received a boost in the run up to Christmas as firms anticipate a better festive trading period than last year.

“While firms report being hopeful for a more successful 2023, inflation and the risk of an economic downturn remain the biggest concerns for businesses, with rising costs evidenced by the number of firms expecting to raise prices.

“Wage growth is expected to remain high for now as retaining existing staff and attracting new talent will continue to be priorities for many businesses going into next year.”

Bank of Scotland – Christmas business barometer

A THIRD OF SCOTTISH BUSINESSES IN BETTER “ELF” THIS CHRISTMAS ! 

Bank of Scotland survey shows: 

  • 33% of businesses expect higher revenues this Christmas compared to last year 
    • 23% of businesses expect to see increased demand this seasonal period
    • Only one in ten (10%) of retailers say they are completely ready for Christmas trading
  • However, a fifth (20%) of firms said they do not feel fully prepared for the festive trading period 

Despite high inflation, rising energy prices and a tighter labour market, 33% of firms in Scotland expect this Christmas trading period to be merry and bright compared to last year, according to the latest insight from the Lloyds Bank Business Barometer.

Those predicting a bumper festive period cited having more time to prepare (25%), while increasing customer demand was cited by 22% of firms as they felt less affected by Covid restrictions due to the Omicron variant last year. Those expecting a worse Christmas trading period said they were struggling with increased costs of doing business (10%). 

Almost three-quarters of businesses surveyed said that Christmas was important for their future prospects (74%), but only one in ten (10%) said they felt completely prepared for Christmas. Meanwhile, a fifth (20%) said they are not yet fully prepared for the festive period. 

When asked what could help firms prepare more effectively, 30% said they wanted more support with rising costs, with 23% saying that better access to their supply networks would help. Skilled workers were also high on businesses’ wish lists, with 25% saying access to more skilled staff would boost Christmas trading.  

Chris Lawrie, area director for Bank of Scotland, said: “This year has been marked by highs and lows but it’s encouraging to see many firms are in good spirits about trade over the festive period.  

“With no restrictions in place, the opportunities for businesses are clear but we know that some aren’t fully prepared for this Christmas trading period.  It’s essential that businesses put plans in place now to carefully manage cashflow and make the most of what will be a busy end of the year.” 

Business confidence in Scotland is highest in the UK

Bank of Scotland Business Barometer for November 2022 shows:   

·       Business confidence in Scotland rose 19 points during November to 24% – the highest reading since July 2022 and highest of all UK nations and regions 

·       Scottish businesses identify top growth opportunities as investing in their teams (43%), evolving their offering (40%) and introducing new technology (35%) 

·       Overall UK business confidence remains robust at 10% with all regions and nations reporting a positive confidence reading apart from the South East 

Business confidence in Scotland rose 19 points in November to 24% – the highest reading since July 2022 and highest of all UK nations and regions, according to the latest Business Barometer from Bank of Scotland Commercial Banking.  

The survey was conducted between 1st-15th November, before the Chancellor’s Autumn Statement announcement on Thursday the 17th November. 

Companies in Scotland reported higher confidence in their own business prospects month-on-month, up eight points to 30%.  When taken alongside their optimism in the economy, up 30 points to 16% this gives a headline confidence reading of 24%.  

Scottish businesses identified their top target areas for growth in the next six months as investing in their teams (43%), evolving their offering (40%), and introducing new technology (35%).   
 
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. 
 
A net balance of 8% of Scottish businesses expect to increase staff levels over the next year, down eight points on last month. 
 
Overall UK business confidence fell five points during November, but remained positive at 10%. Firms’ outlook on their future trading prospects was down two points to 25%, and their optimism in the wider economy dropped four points to -2%. Despite a seven-point dip, UK businesses remained positive about hiring intentions with 14% of firms aiming to create new jobs in the next 12 months. 

All UK regions and nations, apart from the South East, reported a positive confidence reading in November, with seven recording a month-on-month increase in confidence. Of those recording an increase in confidence, Scotland, Wales (up 12 points to 17%) and the South West (up nine points to 5%) saw the largest monthly changes. 

Chris Lawrie, area director for Bank of Scotland, said: “It’s encouraging to see confidence among firms in Scotland reach the highest in the UK, as they show their trademark resilience in the face of numerous headwinds and a challenging economy. 

“As firms look to the year ahead, they’ll have a close eye on managing rising prices, and keeping a close eye on working capital will help firms as they try to mitigate the effects of inflation on their operations. We’ll be by their side to ensure they are in the best position possible in the months ahead and they look to capitalise on opportunities for growth.” 

Business confidence in retail increased to 15% (up from 9%), perhaps reflecting a renewed confidence in trading prospects ahead of the festive season. However, business confidence in the manufacturing sector fell for the sixth month in a row, to 4%, down 9 points, the lowest confidence level since early 2021. 

The construction sector held gains made in October, remaining unchanged at 20%, although this level still remains weaker than in the first half of the year. 

Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Business & Commercial Banking, said: “The fall in confidence shows just how tough it is for businesses right now. 

“Pressures from rising costs continue and businesses are starting to feel the burden of higher energy bills. However, the tentative easing of wage expectations should provide some solace although we know the labour market is still tight. 

“We would encourage businesses to keep a keen eye on their costs and cash flow as we head into the festive period. If any businesses are struggling, we would encourage them to reach out for support. At Lloyds Bank we remain by the side of businesses to help navigate these challenging times.” 

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “Given the recent political and economic landscape, it comes as little surprise that economic optimism and business confidence have fallen this month.

“Pay growth expectations remain high by historical standards, which could signal ongoing difficulties ahead for businesses to fill vacancies.

“Looking ahead, it will be interesting to see if the clearer policy picture provided by the Autumn Statement will lead to business confidence moving in a more positive direction as we go into 2023.”