Business confidence fell in Scotland in December but remained in positive territory as firms look to invest in the year ahead, the latest Business Barometer from Bank of Scotland Commercial Banking has revealed.
The latest survey showed overall business confidence in the country fell nine points over the month to 15%. Companies in Scotland reported lower confidence in their own business prospects month-on-month, down five points at 25%, while their overall optimism about the economy also fell 10 points to 6%.
The barometer sees 1,200 businesses polled monthly to provide early signals about Scottish and UK economic trends. Overall UK business confidence rose seven points during the last month to 17%, with eight out of 11 nations and regions reporting a higher reading than November.
READ MORE: New chair appointed at ScotlandIS to lead in 'challenging year ahead'
The bank said Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (36%), investing in their teams (31%) and entering new markets (25%).
Meanwhile a net balance of 11% of businesses in the region expected to increase staff levels over the next year, up three points on last month.
Chris Lawrie, area director for Scotland at Bank of Scotland Commercial Banking, said: “Although business confidence has dipped it’s encouraging to see it remain in positive territory, which is testament to the resilience of the business community here in Scotland.
“After a turbulent few months many companies are now looking at shoring up their investment plans for the year ahead. Those planning to invest in their teams and export into new markets will do well to keep a close eye on cash flow to ensure they’re ready to capitalise on opportunities as they arise.”
Paul Gordon, managing director for SME and Mid Corporates, Lloyds Bank Commercial Banking, said: "It’s encouraging to see the confidence of most regions and nations rallying as we end the year. This has been a tough time for businesses with rising costs and much uncertainty, but some firms are becoming more confident as we head in to 2023.
"While wage expectations start to temper, prices continue to rise and keeping a close watch on cash flow remains a priority for businesses, no matter what industry you operate in."
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: "Business confidence has received a boost in the run up to Christmas as firms anticipate a better festive trading period than last year. While firms report being hopeful for a more successful 2023, inflation and the risk of an economic downturn remain the biggest concerns for businesses, with rising costs evidenced by the number of firms expecting to raise prices.
"Wage growth is expected to remain high for now as retaining existing staff and attracting new talent will continue to be priorities for many businesses going into next year."
Don't miss the latest headlines with our twice-daily newsletter - sign up here for free.
