New data shows that business confidence in Scotland was joint highest of all UK nations and regions last month, May 2024.

Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 16 points at 60%, Bank of Scotland’s latest Business Barometer found.

When taken alongside their optimism in the economy, up 13 points to 53%, this gives a headline confidence reading of 57% (versus 42% in April) – the joint highest overall confidence reading in May alongside the South East of England.

Looking ahead to the next six months, Scottish businesses identified their top target areas for growth as investing in their team, for example by investing in training (44%), evolving their offering (40%), and introducing new technology (36%).

The West Midlands (56%) followed Scotland and the South East of England as the second-most confident UK nation or region.

Across the UK as a whole, business confidence reached its highest level since 2015, rising by eight points to a net balance of 50%.

Businesses showed increased optimism in both their trading prospects (up nine points month-on-month to 54%) and the economy (up seven points to 46%).

Firms’ trading outlook was also the most optimistic in seven years, while economic optimism was the highest recorded since September 2021.

The data for this edition of the Business Barometer was collected between the 1st and 16th of May, before the UK general election was announced.

Speaking on the findings, Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “These results highlight a notable improvement in business confidence.

“Optimism about the economy increased to 46% this month – the highest result since September 2021, when the country was emerging from the Covid-19 pandemic, but before the energy crisis after the invasion of Ukraine.

“The regional picture has also improved – we’ve now seen increases in seven of the UK’s 12 regions, where there was previously a more mixed picture. Results in the South East, Scotland and the West Midlands were particularly strong.”

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Paul Gordon, managing director for SME and mid corporates at Lloyds Bank Commercial Banking, also commented: “The last three months saw confidence unchanged at 42% as businesses adjusted to the economic environment.

“That consistency has been followed up by a marked increase in confidence in May with improved scores for trading prospects, economic outlook and hiring intentions.

“Following on from last month, there also continue to be positive signs for the labour market as businesses show increased hiring intentions.

“We remain committed to supporting our clients, providing the resources, expertise and solutions necessary to help businesses thrive in this evolving landscape.”