By Peter A Walker
Copyright insider
Business confidence in Scotland fell 20 points during September to 39%, according to the latest Business Barometer from Bank of Scotland.
Companies in Scotland reported lower confidence in their own business prospects month-on-month, down 20 points at 45%. When taken alongside their optimism in the economy, down 18 points to 34%, this gives a headline confidence reading of 39%; versus 59% in August.
Looking ahead to the next six months, Scottish businesses identified their top target areas for growth as investing in their team (44%), evolving their offering (39%) and introducing new technology (30%).
Overall, UK business confidence fell 12 points in September to 42%.
Firms across manufacturing, construction, retail and services all saw confidence fall this month. The biggest change was in manufacturing with a decline of 31 points to 31%; a two-year low.
Retail sentiment fell 17 points to 40%; its lowest level in four months. Similarly, confidence in the service sector fell six points to 47%; the lowest reading since April. Construction continued to decline for the fourth consecutive month; dropping 5 points to 35%.,
Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking, said: “Despite a fall in confidence, Scottish firms remain focused on growth – planning to invest in their people, evolve their products and services and explore new technologies.”
Hann-Ju Ho, senior economist at Lloyds Commercial Banking, added: “While increased market volatility earlier in the month may have impacted confidence, levels of trading prospects and economic optimism remain above their long-term averages.
“Businesses may find reassurance that the Bank of England is expected to reduce interest rates further in the next six months, while long-term global bond yields have calmed which, if sustained, may have a positive impact on businesses as we move into the last few months of the year.”
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