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Confidence increases amongst Scottish firms


26 February 2021

Bank of Scotland’s Business Barometer for February 2021 shows: 

  • Overall confidence of firms in Scotland rose 15 points in February to -17% 
  • Optimism grows in all UK regions as firms expect lockdown restrictions to ease in the coming weeks
  • Overall UK business confidence back in positive territory for the first time since March 2020


Business confidence in Scotland rose 15 points during February to -17%, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

Companies in Scotland reported higher confidence in their own business prospects month-on-month, up 16 points at -11%.  When taken alongside their views of the economy, up 15 points to -22%, this gives a headline confidence reading of -17%.

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

When it comes to jobs, a net balance of 4% of businesses in Scotland expect to reduce staff levels over the next year, down 24 points on last month.

Across the UK, overall business confidence rose in February as the government announced it would be creating a ‘roadmap’ out of lockdown. Confidence increased by nine points to 2%, the first net positive reading since March 2020. Firms’ economic optimism also jumped 12 points month-on-month to 2%. 

All UK nations and regions saw a month-on-month increase in confidence in February, with the biggest increases in the North West (13% vs -5% in January), the East Midlands (10% vs -8% in January), Wales (-5% vs -20% in January) and Scotland (-17% vs -32% in January). Despite this, four remained in net negative territory with Wales (-5%), the South West (-6%), the East of England (-8%), and Scotland (-17%) all in the red.

Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “The rise in confidence of Scottish businesses is a real positive and we hope to see this continue as the vaccination rollout accelerates, and we work towards the easing of lockdown restrictions and the reopening of the economy. 

Confidence increased across all four broad industry sectors to the highest levels since March 2020. After a soft start to the year, manufacturing jumped by fourteen points to 5%, while construction rose eight points to 7%. Confidence in retail extended nine points to 3%, while services advanced by ten points to 1%, led by broad-based improvements in the subsectors.

Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, said: “It has been very promising to see an increase in optimism across all regions and nations in February, led by London, the North West and East Midlands. In the sectors, the story has been positive too, with the four broad industries recording the highest levels of confidence since March 2020.  What this shows us is that the majority of the UK is gearing up for an economic revival, with the steady vaccine rollout fuelling optimism.”

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The uplift in business confidence and its entry into positive territory after nearly a year suggests that firms are cautiously pinning their hopes on economic revival in the future and the continued success of the vaccine rollout. In the coming weeks, announcements in the Budget and prospects of an easing of lockdown restrictions will hopefully help to bolster the recovery in business confidence as the economy starts to reopen.” 

“Scottish businesses have shown real resilience since the start of the pandemic and we remain by their side, helping them navigate the road ahead.” 

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