While Scottish firms’ optimism in the economy held steady month-on-month at 48%, businesses reported lower confidence in their own trading prospects, down 10 points at 47%. Taken together, this gives a headline confidence reading of 47% (vs. 52% in May).

However, a net balance of 55% of Scottish businesses expect to increase staff levels over the next year, up 25 points on last month.

Looking ahead to the next six months, Scottish businesses identified their top target areas for growth as evolving their offering, for example by introducing new products or services (53%), investing in their team, for example through training (48%) and entering new markets (41%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

National picture

Overall, UK business confidence increased one point in June to 51%.

Firms’ optimism in their own trading prospects strengthened one point to 57%, while their confidence in the wider economy also rose one point to 45%.

Wales was the most confident UK nation or region in June (67%), followed by London (64%).

Sector insights

Business confidence in the manufacturing and retail sectors saw significant gains this month, with 12-point rises in both sectors to 52%. For manufacturing, this demonstrates an 11-month high.

Construction and services however saw decreases in confidence, with falls by five points and four points respectively.

Martyn Kendrick, Scotland Director at Bank of Scotland Commercial Banking, said: “Despite lower overall confidence, Scottish businesses are still setting out plans for growth – whether that’s through plans to hire, or steps like launching new products and services. We remain ready to support every step of their journeys.”

Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “Business confidence has continued its positive momentum, following the significant gains we saw in May. 

“In particular, the sustained rise in hiring intentions suggests that while firms do still face challenges, they may be starting to look beyond short-term staffing needs and preparing for future growth.”

Paul Kempster, managing director for commercial banking coverage, Lloyds Business & Commercial, said: “June’s figures for UK businesses shows a sustained picture of growth and opportunity. Overall, while there have been some fluctuations, it’s encouraging to see all regions and nations well above the long-term average.

“As business confidence continues, we are committed to supporting businesses with a range of financial services to help them achieve their growth ambitions.”