Brexit casts shadow over cautious rise in Scottish confidence
By Victoria Masterson
13:50, 13 JUL 2018
Scottish Business Insider magazine www.insider.co.uk
Firms are increasing investment and recruitment plans - but slowly
Businesses in Scotland are advancing investment and recruitment plans as confidence rises, although Brexit still remains a concern, according to a new report.
The Bank of Scotland Business in Britain report found business confidence in Scotland rose three points to 20 per cent in the first six months of the year.
In line with this rise – calculated as an average of respondents’ expected sales, orders and profits over the next six months – firms are increasing their investment and recruitment plans.
But the shift is still cautious, with Brexit uncertainty now the single greatest risk to firms in Scotland in the next six months - cited by 29 per cent of firms across the country.READ MORE
“Despite firms starting to feel more confident as the landscape shows signs of levelling out, Brexit uncertainty is still at the forefront of minds across Scotland," said Fraser Sime, regional director for Scotland at Bank of Scotland said.
“We are however seeing businesses begin to take cautious steps towards growth, with plans to increase investment and recruit more staff.
“Now we need to continue to support those businesses to ensure they seize every opportunity being created by the current climate in order to grow and achieve success.”
Just under a half (45 per cent) of firms in Scotland expect a negative impact on their business if no trade agreement is reached with the EU. A tenth expect a positive impact, while 45 per cent either don't expect any impact or said they didn’t know.
The net balance of firms looking to grow investment in the next six months rose by 11 points to 13 per cent, compared with January.READ MORE
Although the net balance of businesses looking to hire more staff rose by nine points to two per cent since the start of the year, the share of firms that reported difficulties hiring skilled labour also rose two points to 45 per cent.
Perhaps in response to this, the number expecting to increase pay rose by six points to 21 per cent.
The Business in Britain report, now in its 26th year, gathers the views of more than 1,500 UK companies, predominantly small to medium sized businesses, and tracks a range of performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.
Nationally, business confidence was highest in the transport & communication and construction sectors, with the construction sector in particular registering a significant rise compared with January’s survey, rising 12 points to 26 per cent.
Confidence was lowest in retail & wholesale, and in hospitality & leisure, both of which saw confidence fall since January.