Business confidence in Scotland fell five points during June to 47%, according to the latest Business Barometer from Bank of Scotland.
While Scottish firms’ optimism in the economy held steady month-on-month at 48%, businesses reported lower confidence in their own trading prospects, down 10 points at 47%. Taken together, this gives a headline confidence reading of 47% (versus 52% in May).
However, a net balance of 55% of Scottish businesses expect to increase staff levels over the next year; up 25 points on last month.
Looking ahead to the next six months, Scottish businesses identified their top target areas for growth as evolving their offering (53%), investing in their team (48%) and entering new markets (41%).
Business confidence in the manufacturing and retail sectors saw significant gains this month, with 12-point rises in both sectors to 52%. For manufacturing, this demonstrates an 11-month high.
Construction and services, however, saw decreases in confidence, with falls by five points and four points respectively.
Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking, said: “Despite lower overall confidence, Scottish businesses are still setting out plans for growth – whether that’s through plans to hire, or steps like launching new products and services.”
Hann-Ju Ho, senior economist at Lloyds Commercial Banking, added: “Business confidence has continued its positive momentum, following the significant gains we saw in May.
“In particular, the sustained rise in hiring intentions suggests that while firms do still face challenges, they may be starting to look beyond short-term staffing needs and preparing for future growth.”
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