Business confidence 'at highest level since pandemic began'

Confidence among businesses in Scotland is at its highest level in more than a year, a financial report suggests.

Firms reported greater levels of belief in their own prospects and a smaller proportion of companies expect to make staff redundant in the next year compared to the previous month, the Bank of Scotland’s Business Barometer for April indicates.

The upturn comes as hospitality and retail begin to reopen, with Scotland’s business confidence rating rising 11 points in April to 9%, the first net positive reading since February last year.

Some 9% of firms said they expected to reduce staffing levels in the next year, compared to 20% of firms in March.

The survey questions 1,200 businesses across the UK every month to gauge economic and trading prospects.

It found that overall UK business confidence is at 29% – the highest reading since September 2018.

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “With hospitality and retail reopening this month, firms are feeling more optimistic as they begin to welcome people back to shop, eat and enjoy what Scotland has to offer.

“While some businesses are still planning to reduce staffing levels this year, it’s encouraging to see the number of companies planning job cuts has decreased month-on-month, a trend we hope to see continue.

“As lockdown restrictions ease over the coming weeks, we will continue to stand by Scottish businesses as they look to their recovery.”

The business barometer collects the average of responses about how companies feel regarding economic outlook and their own trading prospects.

The overall balance of opinion is compiled by weighing up the percentage of firms that are positive in outlook versus those that are negative, with responses weighted to reflect the make-up of the economy.

Overall in the UK, business optimism increased in all sectors, with manufacturing (40%) and retail confidence (39%) levels at three-year highs.

Services confidence also rose to 25%, which was also the highest it has been since 2018.

The April figures are based on the responses of 1,200 firms – including 95 businesses in Scotland – between April 1 and 19.