Business confidence in Scotland fell in October, a study finds

Business confidence in Scotland fell 10 points to 5% in October as businesses faced “continued economic challenges”, according to new research.

The latest Bank of Scotland Commercial Banking Business Scoreboard showed business confidence in manufacturing fell for the fifth straight month to 13%, the lowest confidence reading since February 2021.

Retail confidence fell six percentage points to 9%, while in services it fell to 16%, both the lowest readings since early last year.

However, the construction sector posted a 10 percentage point increase to 20%, although this level is still weaker than in the first half of the year.

Scottish companies identified their top target areas for growth over the next six months as developing their offering (33%), investing in their teams (29%) and entering new markets (27%).

Chris Lawrie, Area Director for Scotland at Bank of Scotland said: “Ongoing economic challenges, not least the cost of doing business, are hitting companies and we see this reflected in a less optimistic outlook.

“As we approach what for many is the busiest trading period of the year, businesses across the country must prioritize maintaining steady cash flow to remain resilient and be well-equipped for any growth opportunity.

“After all, Christmas can be a hectic and expensive time for businesses and their customers, so businesses need to have a plan to get through this and set aside some money to cover unexpected costs.

“We will remain at the side of Scottish companies to help them continue to navigate the challenging market conditions and push for growth.”

The survey was conducted between 3rd and 17th October with 1,200 companies including 100 companies in Scotland.

UK general business confidence fell one point to 15% in October.

Paul Gordon, Managing Director for SME and Mid Corporates at Lloyds Bank Commercial Banking, said: “As we head into the winter months and price pressures continue, energy price increases will start to bite and we see ongoing pressure on wage expectations.

“Companies need to keep an eye on costs to ensure they are in the best possible position to withstand future headwinds.

“For companies that are struggling, we recommend reaching out to their networks for support.

“At Lloyds Bank we remain with businesses as we navigate these challenging times.”

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