Business confidence in Scotland rose during April, according to the latest Business Barometer from Bank of Scotland Commercial Banking.
Companies in Scotland reported lower confidence in their own business prospects month-on-month, down 14 points at 44%. When taken alongside their optimism in the economy, up 17 points to 40%, this gives a headline confidence reading of 42% - versus 41% in March.
Scottish businesses identified their top target areas for growth in the next six months as hiring new people and investing in training (36%), investing in sustainability (34%) and adding new products or services (31%).
A net balance of 42% of businesses in Scotland also expect to increase staff levels over the next year; up one point on last month.
Around 1,200 businesses were surveyed - including 100 businesses in Scotland – between 2 and 16 April.
Overall UK business confidence held steady at 42% in April; the same level as recorded in March and February.
Businesses in the manufacturing sector reported increased confidence this month, up four points to 45%, which is the highest level for three months. Similarly, confidence among firms in the services sector (42%) and construction (41%) also improved, largely driven by greater economic optimism.
In retail, confidence pulled back slightly from last month’s strong showing to 40%, illustrating that confidence in this sector remains fragile.
Martyn Kendrick, director for Scotland at Bank of Scotland Commercial Banking, said: “Scottish businesses are still facing high costs, but such an encouraging rise in economic optimism suggests the pressure on their bottom lines is starting to ease as inflation comes down.
“Looking ahead, events like Taylor Swift's Eras tour, the Edinburgh Festival, and the 152nd Open golf championships are expected to drive a significant influx of tourists to Scotland over the summer so there’s lots for businesses to be excited about.
“However, if firms are going to make the most of this opportunity for growth, they need to have robust working capital and the appropriate resources in place.”
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