British businesses are reporting the highest levels of confidence in the economy since the beginning of the US-Iran war.
The business barometer, published by Lloyds and its subsidiary Bank of Scotland, showed growing optimism in an indication of greater resilience to higher energy prices and inflation than had been feared.
A rise of four points in August takes it to the highest level since March, shortly after the outbreak of the Middle East conflict on 28 February.
The indicator had been falling for the past three months, with oil prices and inflation rising.
“Businesses are reporting stronger customer demand, greater optimism about the wider economy and growing confidence in their own trading outlook, all of which will be helping to support investment and growth plans,” said Amanda Murphy, chief executive for Lloyds business and commercial banking.
“While businesses continue to operate in a challenging environment, easing cost pressures and fewer firms expecting to raise prices in the coming year should allow them to focus less on managing headwinds and more on pursuing growth.”
Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking, said: “Confidence has increased among Scottish businesses this month, with firms feeling more optimistic about both their own trading outlook and the wider economy.
“What stands out is that businesses aren’t just feeling more positive, they’re planning for growth. Stronger customer demand is giving firms confidence to invest, whether that’s in technology, new products and markets, or their people.
“With hiring expectations also rising, there’s a clear sense that Scottish businesses are looking ahead, ready to capitalise on opportunities for growth.”
Uplift for industry
Scotland’s industrial plants have seen an uplift in staffing levels and training investment, but “some strong headwinds” remain, according to a report from trade group Scottish Engineering.
Staffing levels within the sector have increased by 14% – an improvement from the previous quarter’s 9% rise and the strongest employment recording of the year so far.
The trade body said 48% of its members maintained headcount.
The latest research also showed that investment in training within the sector had increased by 17% this quarter, though that is slightly reduced from 21% previously.
Scottish Engineering chief executive Paul Sheerin said: “This third quarterly survey of the year maintains an overall upbeat review and outlook for our sector. However, there remain some strong headwinds within the industry.”
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