Scottish business confidence rebounds in January

Scottish business confidence has risen by 13 points during January to 37% – the highest reading since September, according to Bank of Scotland’s latest Business Barometer.

Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 23 points at 45%.

When taken alongside their optimism in the economy, it increased by up 4% points to 30%, giving a headline confidence reading of 37%.

The bank questions 1,200 businesses each month, including 86 businesses Scotland, with the overall ‘balance’ of opinion weighing up the percentage of firms that are positive in outlook, against those that are negative.

A net balance of 24% of businesses in Scotland expect to increase staff levels over the next year, up one point on last month.

Firms remained positive about their future trading prospects, despite a two-point dip month-on-month to 41%, and were optimistic about the economy overall, reporting a reading of 38% – up one point on December’s result.

The net balance of businesses planning to create new jobs in the next 12 months decreased marginally to 29%.

Industry sector performance was mixed during January, with confidence among manufacturers increasing by three points to 43%, reaching its highest level for three months, due to an easing of supply chain pressures.

Retail confidence also rose by one point to 44%, while confidence among firms in IT and communications remained particularly strong at 72%.

The impact of Omicron over the festive period meant that the service sector extended its recent run of modest decreases in January, dropping one point to 38%.

However, hospitality has recovered some of December’s decline, rising from 6% to 38%.

Fraser Sime, regional director for Scotland at Bank of Scotland commercial banking, said: “After a turbulent end to the year with the rise of the Omicron variant sparking new restrictions, it’s encouraging to see Scottish business confidence rebound as we kick off 2022.