Business confidence in Scotland rose 10 points during September to 15%, ending three consecutive months of decline, according to the latest Business Barometer from the Bank of Scotland.
The survey, which included 98 businesses in Scotland, was conducted between 1 and 15 September; before the Chancellor’s mini-budget.
Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 18 points at 33%. When taken alongside their optimism in the economy, up two points to -4%, this gives a headline confidence reading of 15%.
Scottish businesses identified their top target areas for growth in the next six months as investing in their teams (39%), evolving their offering (38%) and diversifying into new markets (34%).
A net balance of 18% of Scottish businesses expect to increase staff levels over the next year, up eight points on last month.
Overall, UK business confidence stayed the same as in August during September, at 16%.
Despite the net balance of businesses planning to create new jobs increasing by one point to 17%, firms’ outlook on their future trading prospects dropped one point to 25%, while optimism in the wider economy also fell by one point to 5%.
Chris Lawrie, area director for Scotland at Bank of Scotland, said: “It’s encouraging to see business confidence in Scotland back on the rise, despite the myriad of economic headwinds the country’s firms continue to face.
“It’s also pleasing to see businesses here planning to invest in their people and continue to evolve the services they offer as they target new opportunities to grow.
“At this challenging time, companies must also keep a close eye on cash flow to help mitigate any major turbulence ahead and ensure they’re ready to capitalise on opportunities to scale up as they arise.”
Business confidence rose by two points in both the retail and service sectors - 15% and 17% respectively - however both these figures are close to 12-month lows.
Manufacturing and construction firms saw their lowest levels of business confidence this year, down two points in manufacturing to 14% and down 16 points to 10% in construction. This was driven by overall falling optimism in the economy.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, added: “Firms’ assessment of their own trading prospects remained steady and continues to show some resilience during turbulent times, yet cost pressures remain, as more businesses look to raise prices to help protect their margins, while wage pressures show little sign of abating.
“With the recent volatility in financial markets as well as the Government’s Growth Plan and energy cap announcements, it will be interesting to see how these measures affect business confidence.”
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