Scottish business confidence dips in July as restriction easing postponed



Business confidence in Scotland fell 14 points during July to 28%, as the easing of restrictions was delayed by three weeks.

The latest Business Barometer from Bank of Scotland Commercial Banking showed that companies in Scotland reported lower confidence in their own business prospects month-on-month, down nine points at 33%.

When taken alongside their optimism in the economy, down 20 points to 23%, this gives a headline confidence reading of 28%.

Around 1,200 businesses are surveyed every month – including 97 in Scotland – on behalf of Lloyds Bank by BVA BDRC.

A net balance of 13% of businesses in the region expect to increase staff levels over the next year, down five points on last month.

Overall UK business confidence dipped three points to 30% in July but remains well above the year-to-date average of 19%.

Alongside Scotland, East of England and Wales reported the biggest falls in confidence – but all retained an overall positive reading.

The overall number of UK firms expecting planning to create new jobs in the next twelve months rose one point to 18% in July, the highest reading since November 2018 and the sixth consecutive month that employment expectations have risen.

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “The decision by the Scottish Government to postpone the complete easing of lockdown restrictions until August may have a part to play in the subdued confidence among Scottish firms this month.

“But while business optimism has taken a hit, the overall picture is still positive and we know many firms, particularly those in the hospitality and tourism industry are gearing up to re-open fully and take advantage of what will hopefully be a busy summer season.

See also  S&P, Dow open lower on jitters over Trump's China response

“It’s clear the pandemic is continuing to cause some uncertainty, and we’ll be here to support Scottish business through the coming months and beyond.”

Confidence fell slightly in the broad economic sectors in line with the overall economic picture.

Manufacturing and retail confidence declined for a second month from previously elevated levels.

Nevertheless, at 33% (down from 35%) for manufacturing and 32% (down from 36%) for retail, confidence remains at historically strong levels. Construction and services sector confidence also dipped to 33% (from 35%) and 28% (from 31%), respectively.

In the subsectors, confidence was particularly strong in hospitality (63%, up from 38%), and transport (53%, up from 37%), reflecting the further opening of the economy, as well as in business services and finance.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “A sixth consecutive monthly increase in employment expectations alongside an increase in pay growth predictions continues to highlight the resilience of UK businesses despite a slight dip in overall business confidence.

“With Covid-19 restrictions having now been significantly eased in parts of the UK we can have further confidence in firms’ outlook for the UK economy.”

Don’t miss the latest headlines with our twice-daily newsletter – sign up here for free.



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here