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Scottish business confidence falls in June
Business confidence in Scotland fell 14 points in June to 43%, according to the latest Bank of Scotland Business Barometer.
Businesses in Scotland reported lower confidence in their own business prospects month on month, falling 16 points to 44%. When taken together with their optimism in the economy, which fell 11 points to 42%, this gives an overall confidence reading of 43% (vs. 57% in May).
Looking ahead to the next six months, businesses in Scotland have identified their key growth areas as investing in their staff, for example through training (44%), introducing new technology (34%) and entering new markets (33 %).
Overall UK business confidence fell nine points in June to a net 41%. However, this was consistent with levels seen during Q1 2024, before the sharp increase in May, and remained above the long-term average (28%).
Although companies reported lower confidence in their own business prospects, down 10 points to 44%, and in the economy, down seven points to 39%, both remained robust.
Results across all sectors were mixed in June, as three of the four sectors saw a decline in trading outlook. Construction fell 16 points to 42%, and there were other notable declines in retail (down 14 points to 35%) and services (down 11 points to 46%). Manufacturing, however, bucked this trend, rising by two points to 51%.
Martin KendrickBank of Scotland Commercial Banking regional director for Scotland said: “Although Scottish confidence declined in June, it remains above the UK average for the second month running.
“July and August could bring new opportunities for Scottish businesses through global attractions such as the Edinburgh Fringe, the Cowal Gathering and the Open Championship at Royal Troon.
“It follows the wave of concert-goers who visited the capital for Taylor Swift’s The Eras Tour at Murrayfield, which brought in up to £77 million to the local economy, with fans flocking to cafes, bars and tourist attractions.”
Hann-Ju Hosenior economist at Lloyds Bank Commercial Banking, said: “These results suggest a slight decline in business confidence in June, as business prospects and economic optimism fell below levels seen in recent months. However, these results are still broadly in line with the positive readings we saw earlier in the year.
“Fewer companies indicated that their prices would increase in the coming months, which coincides with last week’s drop in inflation numbers. Meanwhile, there was a mixed set of results seen across sectors, but following last month’s surge, confidence fell in construction as well as retail and services.”