Scots firms showing 'tremendous resilience' as economic woes fail to dent confidence

Business confidence in Scotland has rebounded as firms show “tremendous resilience” in the face of economic headwinds, a monthly survey today reveals.

Confidence north of the Border rose 11 percentage points during April to 28 per cent, according to the latest business barometer from Bank of Scotland Commercial Banking, part of Lloyds Banking Group. It follows March’s slump of 18 points to a reading of just 17 per cent.

Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 16 points at 34 per cent. When taken alongside their optimism in the economy, up five points to 21 per cent, this gives a headline confidence reading of 28 per cent for April.

Hide Ad
Hide Ad

Firms flagged a range of growth opportunities for the next six months, including investing in their team (30 per cent), expanding into new markets (28 per cent) and evolving their offer (26 per cent).

The barometer, which quizzes some 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

A net balance of 26 per cent of businesses in Scotland expect to increase staff levels over the next year, up 17 points on the month before.

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “Rising levels of inflation coupled with growing cost pressures have hit businesses hard in recent months. The retail sector has been particularly impacted by these turbulent economic conditions, forcing many firms to start increasing prices.

“But despite these headwinds, Scottish firms have shown tremendous resilience as business optimism rebounds in April.”

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking: 'Rising levels of inflation coupled with growing cost pressures have hit businesses hard in recent months.'

Overall, UK business confidence was unchanged during April, at 33 per cent. Firms’ outlook on their future trading prospects rose five points to 39 per cent, but their optimism in the economy dipped slightly on March’s reading (down from 32 per cent to 26 per cent).

Hide Ad
Hide Ad

The net balance of UK businesses planning to create new jobs decreased by six points to 26 per cent.

Every UK region and nation reported positive confidence readings in April. Wales (up 25 points to 20 per cent), the south east of England (up 19 points to 30 per cent) and the West Midlands (up ten points to 42 per cent) reported the largest increases month-on-month, with the West Midlands now the most optimistic region overall.

Paul Gordon, managing director for SME (small and medium-sized enterprise) and mid corporates at Lloyds Bank Commercial Banking, said: “The challenges that businesses are facing continue to grow with no clarity on when inflationary or supply-chain pressures will ease alongside the ongoing war in Ukraine.

“To respond to this, businesses should ensure they keep a tight rein on input costs to ease pressure on margins wherever possible and keep in close contact with suppliers so disruption to any raw materials is kept to a minimum.

Hide Ad
Hide Ad

“However, we can already draw positives from some of the changes at a regional and sector level in April, which demonstrates that businesses are not being universally impacted by the challenges faced,” he added.

Read More
Scottish business confidence slumps but growth remains on the cards