Business confidence in Scotland rose three points during August to 59%, according to the latest Business Barometer from Bank of Scotland.

Companies in Scotland reported slightly lower confidence in their own business prospects month-on-month, down five points at 65%. However, when taken alongside their optimism in the economy, up nine points to 52%, this gives a headline confidence reading of 59% (vs. 56% in July).

A net balance of 70% of businesses in the country also expect to increase staff levels over the next year, up 47 points on last month.

Looking ahead to the next six months, Scottish businesses identified their top target areas for growth as investing in their team, for example through training (59%), evolving their offer, for example by introducing new products or services (39%) and entering new markets (39%).

National Picture

Overall, UK business confidence rose two points in August to 54%.

While firms’ confidence in the wider economy dropped three points to 44%, their optimism in their own trading prospects rose five points to 63%.

London was the most confident part of the UK in August (69%), followed by the East of England (64%).

Sector Insights

Manufacturing firms saw confidence up 14 points this month, to 62%. This level was previously seen in 2015. Retailers also saw an increase in confidence this month, with levels up 13 points to 57%, a five-month high. However, construction firms confidence fell by five points to 40%, a four-month low while confidence in service sector firms also fell eight points to 53%.

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Martyn Kendrick, Scotland Director at Bank of Scotland Commercial Banking, said: “It’s encouraging to see Scottish business confidence continuing to strengthen, outpacing the UK average for a fourth month in a row.

“The strong focus on team investment and widespread hiring plans demonstrates that Scottish firms are taking a long-term view of growth, building the capabilities they need for sustained success. We’ll continue to provide our support to help businesses across the country achieve their ambitions.”