Business confidence in Scotland up despite Brexit uncertainty, study suggests
Scottish business confidence rose in April despite continuing uncertainty over Brexit, analysis has indicated.
According to figures published in the Bank of Scotland’s Business Barometer, confidence rose by 12 points during the month to 9%.
It represents the highest reading measured by the bank since November last year.
The Business Barometer questions 1,200 companies monthly and provides early signals about UK economic trends both regionally and nationwide.
The study also indicates companies in Scotland reported higher confidence in their business prospects in April at 19% – up nine points from March.
Taken together with greater optimism about the economy, the figures give an overall confidence of 9%, the bank said.
Scottish businesses’ hiring intentions also showed a net balance of 1% of companies expect to hire more staff during the next year, up seven points on last month.
A net balance of 20% of Scottish firms said they felt the UK’s exit from the European Union was having a negative impact on their expectations for business activity, down eight points on a month ago.
The UK had been expected to depart the EU on March 29 but Article 50 was extended until April before being extended once more to October 31.
It means it could be another six months until Brexit but the UK is expected to depart sooner if a deal can be agreed ahead of the deadline.
Fraser Sime, of the Bank of Scotland, said: “It’s encouraging to see the positive UK picture presented by April’s Business Barometer reflected in Scotland, after a dip in confidence was measured last month.
“While welcome, we will all be watching closely to see if this trend continues.
“We know firms continue to navigate a fast-moving macro environment and we remain by the side of Scotland’s business community as they do.
“As part of our commitment to supporting Scottish businesses, we’ve pledged to lend up to £1.6 billion to support Scottish firms this year.”
Across the UK, the overall confidence of firms in manufacturing, construction and services all improved – but retail sector confidence fell.
Manufacturing and construction confidence rose for the first time in three months, increasing by six points to 16% and two points to 15% respectively.
Meanwhile, the retail sector – which posted the highest confidence in March –fell in April by six points, placing it on a par with the manufacturing sector at 16%.
Hann-Ju Ho, a senior economist at Lloyds Bank, said: “While business confidence remains low when viewed against the historic average, it is certainly encouraging to see an increase in overall optimism for the second month in a row.
“Firms appear more positive about both their own trading prospects and the broader economy, although their assessment of the potential impact of the UK leaving the EU remains unchanged.
“We will have to wait and see whether this partial rise converts into a sustained recovery.”