Confidence levels fell ten points during the month to -38 per cent, according to the latest business barometer from Bank of Scotland Commercial Banking.
Companies in Scotland reported lower confidence in their own business prospects, down six points month-on-month at -27 per cent. When taken alongside their views of the economy overall, this gives the headline confidence reading of -38 per cent.
Quizzed over hiring intentions, a net balance of 43 per cent expect to reduce staff levels over the next year, up 11 points on the previous month.
At a UK-wide level, the report tracked a sharp increase in business confidence after the announcement that the Pfizer and BioNTech vaccine has 90 per cent efficacy against Covid-19.
Firms surveyed after the announcement had an overall confidence of -15 per cent, which was seven points higher than those polled before, between the 2 and 8 November. For the month as a whole, UK business confidence registered at -21 per cent, down three points on October.
Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “Confidence has faltered on the backdrop of a tightening of restrictions across large parts of Scotland.
“However, the roll-out of vaccines looks increasingly likely to happen in the coming months, and December’s barometer will provide an indication as to how the ongoing development of the Covid-19 exit strategy is affecting companies’ confidence.”
The barometer questions some 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, added: “The sustained number of coronavirus cases and more restrictive lockdown measures saw overall business confidence fall again this month.
“Firms across the sectors also continue to remain cautious as they prepare for a new trading relationship with the EU.
“However, confidence increased following the news of a potential vaccine to help combat the virus. The months ahead will be key for businesses as they navigate the winter months and adapt to the evolving landscape.”