Business confidence in Scotland has been on the rise this month, according to the latest Business Barometer from Bank of Scotland. The report indicates an 11-point increase, reaching 42% for the month, compared to last month’s 31%. 

The Business Barometer surveys 1,200 businesses monthly to glean insights on economic trends regionally and locally. 

Scottish companies showed an increase in optimism for their own trading prospects as well, with confidence in this domain surging by 13 points to reach 57%. This sentiment extended to the broader economic landscape as well, with optimism about the economy rising 9 points to 27%. 

“While Scottish businesses have faced a lot of challenges over the past few years and continue to contend with a difficult geopolitical and economic landscape, we are still seeing a strong appetite for growth,” said Martyn Kendrick, regional director for Scotland at Bank of Scotland Commercial Banking.

The report also highlighted what Scottish businesses identified as key areas for growth in the next six months, which included investing in their teams (41%), evolving products and services (28%), and integrating new technology (27%). 

Additionally, 42% of firms anticipate an increase in staff levels over the next year, which has increased 12 points from the previous month’s outlook. 

Nationally, the overall UK business confidence also experienced a robust increase of nine points in January, reaching 44%, the highest level since February 2022. Companies expressed growing confidence in the UK economy, with outlooks improving by ten points to 37%. 

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“We’ve seen improved confidence in almost all sectors – a promising turnaround from December’s decline. A seven-month high in manufacturing and similarly positive results in construction make for positive reading,” continued Gordon.

Furthermore, businesses’ optimism regarding their own trading prospects climbed three points month-on-month to 51%.

Sector-wise, three out of four sectors tracked in the Barometer reported increases in confidence.

Services experienced the most significant surge, jumping 15 points to 45%. Manufacturing confidence rose to 49%, while construction reached a 10-month high of 45%. Retail, however, witnessed a slight dip to 41%.