Bank of Scotland’s Business Barometer for December 2018 shows:


  • Overall confidence for firms in Scotland fell twenty points in the past month to minus nine per cent
  • Despite this, firms’ hiring intentions turned positive, rising three points on November

Business confidence in Scotland fell 20 points during December to minus nine per cent, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

A net balance of 25 per cent of companies in Scotland are now reporting being more pessimistic about the economy than they were three months ago. Last month, firms were evenly split, with as many businesses feeling optimistic as pessimistic.

Meanwhile, a net balance of seven per cent report expecting their own companies to increase business activity in the next year, down from 22 per cent in November.

Together, this gives an overall confidence figure of minus nine per cent, which is 20 points below last month’s figure of 11 per cent.

Despite this, a net balance of one per cent of businesses in Scotland now expect to hire more staff during the next year. November’s figures showed a net balance of two per cent of firms expecting to cut their headcount during the next 12 months.

Across the UK, overall confidence fell seven points to 17 per cent as firms’ optimism about the economy dropped 10 points to seven per cent. Companies’ confidence in their own business prospects slipped five points to 26 per cent.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Fraser Sime, director, SME banking, Bank of Scotland Commercial Banking, said: “Confidence among businesses across Scotland has fallen, which is understandable given changes globally and domestic uncertainty.

“But, despite the dip in confidence, a growing number of firms now plan to hire more staff in 2019, showing that businesses are still prepared to invest in growth, albeit with a degree of caution.

“With greater clarity expected in the next quarter and beyond, we will hopefully see an increase in confidence levels as firms begin to operate in a more stable environment.”

Across the region, a net balance of 34 per cent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, up 10 points on a month ago.

Regional picture


Businesses in London showed the most confidence, at 32 per cent, ahead of the West Midlands (27 per cent) and Wales (20 per cent).

Those in Scotland were the least confident, with an overall confidence of minus nine per cent, 26 points below the national average.


Overall business confidence fell across all industry sectors. Businesses in the manufacturing and construction sectors were most confident in their prospects at net 23 per cent (down nine points) and 22 per cent (down seven points), respectively.

Confidence of retail businesses was nine points lower at net 21 per cent, while confidence was lowest in the services sector at 13 per cent (down seven points).

Hann-Ju Ho (pictured below), senior economist for Lloyds Bank Commercial Banking, said: “Tentative signs of a recovery in business confidence last month proved to be short-lived, as businesses end the year more concerned about their trading prospects and the wider economy.

“The expected slowdown in economic growth in Q4 could well be extended into early 2019, but there is potential for a rebound in sentiment should there be some respite in uncertainties that firms currently face.”