Business confidence in Scotland rose 11 points during February to 53% – a six-month high – according to the latest Business Barometer from Bank of Scotland.
While companies in Scotland reported lower confidence in their own business prospects month-on-month, down three points at 50%, their optimism in the economy rose 23 points to 55%. Taken together, this gives a headline confidence reading of 53% (vs. 42% in January) – the highest level recorded in the country since August 2024.
Looking ahead to the next six months, Scottish businesses identified their top target areas for growth as investing in their team, for example through training (50%), introducing new technology, such as automation or AI (42%) and investing in sustainability (33%).
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall, UK business confidence rose 12 points in February to 49% — also its highest level since August 2024.
Firms’ optimism in their own trading prospects increased six points to 57%, while their confidence in the wider economy rose 18 points to 42%.
The North-east of England was the most confident UK nation or region in February (69%), followed by the North-west and East of England, both at 61%.
Sector Insights
All four sectors surveyed saw double-digit increases in confidence. The largest improvements were seen in manufacturing, which rose by 13 points to 51%, and construction, which increased by 14 points to 50%. Retail also experienced a significant gain, up 11 points to 51%, and services rose by 10 points to 48%.
Within the services sector, hospitality firms posted a particularly strong rebound in sentiment. Confidence across these sectors reached their highest levels in several months, ranging from four months in services to seven months in manufacturing.
Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking, said: “It’s encouraging to see to see Scottish business confidence rising again – not only to the highest level since August last year, but also ahead of the UK average.
Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking
“Equally promising is that Scottish businesses are leading the country when it comes to integrating sustainability into their growth strategies – with more having it as part of their six-month plans than anywhere else in the UK.
“Businesses are increasingly recognising that renewable practices aren’t just good for the planet, they’re also a smart business decision, with sustainability and growth going hand in hand. We’ll continue to support Scottish firms as they look to make the most of new opportunities, including providing specialist solutions to enable investments in more sustainable business practices.”
Hann-Ju Ho, senior economist, Lloyds Commercial Banking, said: “The rise in business confidence demonstrates the resilience of UK businesses and their ability to navigate challenges, such as rising costs and uncertainty. Increased optimism, along with an expected uplift in trading prospects, is prompting businesses to invest in growing and upskilling their workforce, putting them in a prime position to capitalise on increased demand and drive future growth.
“This chimes with the expectations businesses set out at the beginning of the year, where they predicted a strong start to 2025, with the majority (70%) expecting to see their turnover increase in the year ahead. To sustain this positive momentum, it is important that businesses continue to innovate and adapt, ensuring they remain competitive and resilient to future challenges.”
Paul Kempster, managing director for commercial banking coverage, Lloyds Business & Commercial said: “The findings of the latest Business Barometer are encouraging, showing a significant uplift in business confidence and economic optimism across the UK.
“At Lloyds, we are committed to supporting businesses through this positive phase. Our range of financial services and expert advice are designed to help firms navigate the evolving economic landscape, seize new opportunities, and achieve their growth ambitions. We stand ready to assist businesses in capitalising on this momentum, ensuring they have the resources and support needed to thrive in the coming months."