Business confidence 'rises in Scotland but still worst in UK'

Confidence among Scottish firms has risen in July but remains the lowest across the UK nations, according to a survey.

The Bank of Scotland’s latest Business Barometer found firms reporting the same level in confidence in their prospects month-on-month at -33%.

When taken alongside their views of the economy overall, it gives a reading of -37%, a rise of four points from -41% in June.

Fraser Sime, regional director for Scotland at Bank of Scotland commercial banking, said: “While marginal, the slight increase in confidence we’ve seen this month is a step in the right direction.

“There’s still a long way to go for confidence to fully recover but the current transition to phase three of lockdown should hopefully continue to boost many firms’ trading prospects.

“Pessimism is waning in many English regions as the hospitality and leisure sectors open their doors once again.

“With many firms beginning to restart operations here in Scotland this month, August will be telling as to whether the same confidence-inducing effect will take hold here, too.”

Confidence increased eight points to -22% at a UK level during July.

The north-east of England was the most confident region at -3%.

Wales and Scotland were the least confident with -31% and -37% respectively.

The majority of Scottish firms continued to be negatively affected by coronavirus during July.

Almost two-thirds – 64% – experienced a fall in demand for their products and services, up six points on the month before.

But 9% experienced an increase in demand, up four points on June.

With the Job Retention Scheme beginning to wind down from August, 41% of Scottish firms surveyed said they have no workers furloughed.

Of the 55% of businesses reporting disruption to their supply chain during July, 18% expect the situation to improve within three months.

Only 2% expect it will take more than 12 months to return to normal levels.

The survey questions 1200 businesses each month.