Business confidence drops in Scotland in May
Confidence among businesses in Scotland has fallen as a number of firms said they feel Brexit is having a negative effect on their prospects, according to a new report.
The latest business barometer from Bank of Scotland Commercial Banking found that companies’ confidence fell nine points in May to 0%.
Across the UK, overall confidence slipped four points to 10% in the past month.
Meanwhile, companies in Scotland report decreasing confidence in their business prospects at 17%, dropping two percentage points from April to match the latest figure for the UK as a whole.
North of the border, a net balance of 47% of businesses told the barometer they feel that the UK’s exit from the European Union is having a negative impact on their expectations for business activity, up 27 points on April.
Across the UK, a net balance of 21% of firms say it is having an adverse effect.
Fraser Sime, the bank’s regional director for Scotland, said: “Confidence among businesses in Scotland has dipped this month but remains resilient as firms look to manage their way through the current environment.
“Consumer-facing businesses tell us that household spending is holding up well, and we are working by the side of firms to ensure they can take advantage of current opportunities, while preparing for a return to stronger growth when confidence begins rising again.”
The report did find improvements in confidence in some areas, notably the manufacturing sector, which delivered strong readings in a number of UK regions this month.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Overall business confidence continues to sit below the long-term average.
“A slight dip in confidence this month appears largely to reflect companies’ assessment of their own trading prospects for the coming year, and the anticipated impact of the UK leaving the EU.
“It’s encouraging to note that, while we are seeing uncertainty impacting business confidence overall, optimism regarding the wider economy remains broadly steady.”
The Business Barometer questions 1,200 UK businesses every month, including 89 in Scotland.