Business confidence in Scotland rose by 19 points in February as the number of firms feeling a negative impact from Brexit halved, according to the Business Barometer from Bank of Scotland Commercial Banking.
A net balance of 8% of businesses said that the UK’s exit from the EU was having a negative impact on their expectations, compared with 19% a month ago.
Overall business confidence in Scotland bounced back by 19 points to 15%. Companies north of the border reported confidence up 16 points to 14% while overall economic optimism rose 20 points to 15%.
But confidence lagged well behind that of the UK as a whole, where overall confidence was unchanged at 23%. London was highest at 29%, ahead of the West Midlands at 28%, and the East Midlands at 27%. Businesses in Wales came bottom with an overall confidence of -2%.
A net balance of 5% of businesses in Scotland said they expected to hire more staff in the next year, up eight points on last month, according to the survey which questions 1,200 businesses monthly.
Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “This increase in confidence shows great resilience from Scottish businesses. However, companies are likely to act with an element of caution throughout 2020 as some political and economic uncertainty remains. Despite these headwinds, we’re by the side of business and will continue to support the evolving Scottish agenda.
“Take sustainability for example. We’ve a plan to reduce carbon emissions we finance by 50% by 2030. This is just one of the ways we’re helping Scotland prosper and working together to explore opportunities that will fuel growth.”
Overall business confidence fell in the services sector to 19% from 21% but above the 4% level at the end of 2019. Confidence in the manufacturing sector rose 10 points to 31%, while the construction and retail sector increased by two and six points to 29% and 30%.
Paul Gordon, managing director for SME and Mid Corporates, Lloyds Bank Commercial Banking, said: “It is encouraging to see that the regions are starting to align to the long-term national average. London has continued its strong start to the year and with Scottish confidence bouncing back, it could signal businesses’ positive reaction to greater political certainty.
“The slight decline in services’ confidence was offset by improvements in the other sectors. With the third consecutive rise in trading prospects, this 10-month high should signal further growth as we continue into 2020 as businesses begin to respond to this confidence by making investment decisions.”
