Scottish business confidence falls but vaccine news offers hope

Business confidence in Scotland fell 10 points during November to -38%, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

Companies in Scotland reported lower confidence in their own business prospects, down six points month-on-month at -27%.  When taken alongside their views of the economy overall, this gives a headline confidence reading of -38%.

When it comes to businesses’ hiring intentions, a net balance of 43% expect to reduce staff levels over the next year, up 11 points on last month.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
 

Vaccine news boosts UK confidence

At UK level, the report tracked a dramatic increase in business confidence after the 9^th of November announcement that the Pfizer and BioNTech vaccine has 90% efficacy against COVID-19.

Firms surveyed after the announcement between 9^th and 16^th November had an overall confidence of -15%, which was seven points higher than those polled before, between the 2^nd and 8^th November (-22%).

For the month as a whole, UK business confidence registered at -21%, down three points on October.

UK regional and sector overview

The North East had the highest confidence in November at -8%, followed by Yorkshire & the Humber (-11%) and Wales (-15%).

In the industry sectors, confidence declined in manufacturing, construction and retail as stricter lockdown measures were imposed across the UK. Manufacturing confidence fell by 10 points to ‑25%, driven by a sharp fall in optimism about the economy and a smaller decline in trading prospects (chart 3). Construction confidence dropped by 13 points to ‑23%, while retail confidence fell by five points to ‑12%. Services confidence, meanwhile, increased slightly by three points to ‑21%, having already fallen significantly in October.