According to Bank of Scotland’s latest Business Barometer, business confidence in Scotland fell 16 points during September, down to 48%.

Companies in Scotland reported lower confidence in their own business prospects month-on-month, down 19 points at 47%. When taken alongside their optimism in the economy, which was also down 13 points to 49%, this gives a headline confidence reading of 48% (vs 64% in August).

Looking ahead to the next six months, Scottish firms identified their top target areas for growth as entering new markets (37%), investing in their team, for example through training (35%), as well as introducing new technology, such as implementing AI, automation, or digitalisation (30%).

The UK-level picture
Overall UK business confidence in September also dipped, to 47% down from August’s 50%.

Though there was a marginal increase in their own trading prospects (up two points month-on-month to 54%), UK firms’ confidence in the overall economy dropped nine points to 38%.

The joint-most confident regions in the UK were the West Midlands and London, both reporting overall confidence of 59%. Only Northern Ireland, Wales, London, the South West and North West reported an increase in overall confidence.

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Commentary on the findings
Speaking on the latest findings, Martyn Kendrick, who serves as Scotland director at Bank of Scotland Commercial Banking, said: “Despite this dip, which mirrors the broader UK trend, it’s great to see that Scotland remains one of the most optimistic regions in terms of its economic outlook.

“This optimism is well-deserved, given the array of events coming to Scotland this autumn, promising a boost for local SMEs.”

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, also commented: “Although overall confidence fell this month, that fall was from a nine-year high and businesses remain positive about their own trading prospects.

“The joint-highest result this year could suggest that respondents still see a positive future for their own companies, which is also reflected in the largely unchanged employment figures.

“The more mixed picture for economic optimism points to some businesses maintaining a degree of caution. While we still expect economic expansion, it may occur at a slower rate than the first half of 2024.”