Company bosses in Scotland feel less confident about recovering from the effects of coronavirus than those in the other UK nations, according to the Bank of Scotland Business Barometer.
Confidence in the Scottish economy has fallen to -41% in June, the survey of 1,200 UK businesses found. Just over one third said they expected to be operating at more than 50% capacity by the end of this month.
However, one fifth said they do not expect to be open at all by then, while 21% said they thought it would take around three months to be operating at pre-lockdown levels.
Firms’ confidence in their own business prospects has become worse, hitting -33% compared with -26% in May.
Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “Businesses are currently facing challenging times, but as lockdown restrictions begin to ease, it’s encouraging to see that more than a third of businesses are hoping to be back up and running by the end of June.
“We remain by the side of businesses as they navigate this uncertain period and will continue to support them as we emerge from lockdown and look towards a more positive future.”
Despite support, the majority of businesses have seen a fall in demand during June – just 5% reported an increase in demand.
UK-wide, confidence rose three points to -30%. The West Midlands was the least pessimistic at -18%, followed by Yorkshire & the Humber and the North East at -23%.
In June, the construction sector rebounded by 30 points to -14%. The retail sector increased two points to -23% and manufacturing saw an improvement at -35%. Other services fell to -36%, largely reflecting the impact on the hospitality and education sectors.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “While the results suggest the economy may be starting to see some improvement, trading conditions remain difficult for most firms as the majority are still experiencing disruption to supply chains.
“Hopefully the recent Government announcement of further relaxation of restrictions and the slight easing of social distancing measures will enable more businesses to reach their capacity and resume their usual activities, which we would expect to be reflected in further improvements to optimism next month.”