Firms plan staffing increases and investment despite a 19-point drop
Business confidence in Scotland decreased by 19 points during September, reaching 36%, according to the latest Business Barometer from Bank of Scotland.
Scottish companies reported a month-on-month decline in their own trading outlook, down 15 points to 50%. This, combined with a 24-point fall in economic optimism to 21%, resulted in the headline confidence figure of 36%, compared to 55% in August 2026.
Despite the fall in confidence, Scottish firms remain committed to growth, with a net balance of 46% anticipating an increase in staff levels over the next year, a rise of two points from the previous month.
Businesses are also looking towards future investment. Over the next six months, 47% of Scottish firms plan to develop their offering through new products or services, while 45% intend to invest in their teams through training. More than a third, 39%, are targeting investment in sustainability, marking the highest proportion among any UK nation or region.
The current business confidence level in Scotland is now below its 12-month average of 46%. The highest figure recorded this year for Scottish business confidence was 55% in August.
Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking, commented: “While confidence has softened, what stands out is that Scottish businesses are continuing to look ahead and invest in the things that will support their long-term growth. Almost half are planning to increase staffing levels, while firms are also looking to develop new products and services and invest in their people. Scotland’s particularly strong focus on sustainability is another positive sign that businesses are thinking strategically about how they can build for the future. Taken together, that shows a business community that, despite a more challenging backdrop, remains focused on creating opportunities and strengthening its capabilities for the years ahead.”
Nationally, overall UK business confidence saw a 12-point decline to 41% in September, reaching its lowest level since April 2025. This fall, which followed August’s reading of 53%, was attributed to a decline in economic optimism as businesses responded to higher energy prices resulting from renewed tensions in the Middle East.
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Amanda Murphy, CEO for Lloyds Business and Commercial Banking, stated: “While confidence among larger firms remains strong, smaller businesses have seen a fall in sentiment as they continue to navigate higher costs, inflationary pressures and global uncertainty. Overall confidence remains above its long-term average, and most businesses still expect activity to grow over the coming year, underlining the resilience of UK firms. Ensuring smaller firms can share in future growth will be crucial in the months ahead.”
The Business Barometer survey, which has been conducted monthly since January 2002 by Ipsos on behalf of Lloyds Bank, provides early signals about UK economic trends. The latest survey included 1,200 companies, with 92 businesses in Scotland, and was carried out between 2nd and 16th September 2026.
