BoS: Scottish business confidence reaches 51% in July

Companies in Scotland reported higher confidence in their own business prospects month-on-month, up one point at 45%. When taken alongside their optimism in the economy, up 15 points to 57%, this gives a headline confidence reading of 51% (vs. 43% in June).

A net balance of 47% of businesses in the country also expect to increase staff levels over the next year, up four points on last month.

Looking ahead to the next six months, Scottish businesses identified their top target areas for growth as investing in their team, for example through training (54%), evolving their offering, for example by introducing new products or services (41%), and entering new markets (33%).

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking, said: “It’s fantastic to see Scottish business confidence rising again, and staying above the UK average for a second month in a row.

“With the summer in full swing, cities like Edinburgh are readying for a vibrant month ahead. The likes of pubs, shops, and tourist attractions are hoping to benefit from the Fringe and the Edinburgh International Festival, especially as last year saw 2.4 million tickets sold to visitors from more than 170 different countries.

“But this influx of tourists isn’t limited to the capital, with events like the Cowal Gathering in the Highlands, Fringe by the Sea in North Berwick, and the World Pipe Band Championships in Glasgow all playing a part in creating a real a buzz, and new opportunities, across the entire country. Wherever businesses are, and whatever their growth plans, we’ll remain by their side with our support for the ambitions.”

Overall UK business confidence climbed nine points in July to a net balance of 50% – the same as in May when confidence reached an eight-year high.

Businesses’ confidence in their own trading prospects rose 12 points to 56% – the highest reading since April 2017. Meanwhile, confidence in the economy climbed six points to 45%.

Wales and the East Midlands (both 62%) were the joint-most confident UK regions or nations in July, followed by the East of England (61%).

There was an improvement across all sector categories this month – most notably in retail which rose by 25 points to a post-pandemic high of 60%. There were also significant gains in manufacturing trading prospects, with the net balance increasing by nine points to a two-year high. Services rose 10 points to 56%, while construction saw a more modest increase by two points to 44%.