Business confidence in Scotland fell 19 points to 36% in September, as sentiment weakened across most of the UK, according to the latest Lloyds Business Barometer.
Scotland ranked ninth of the UK’s 12 regions and nations, five places lower than in August. Confidence fell in 10 of the 12, the broadest decline since April, with only the West Midlands and the North East recording increases.
Bank of Scotland’s figures for Scotland, published by Glasgow Chamber of Commerce, show that firms’ confidence in their own trading prospects dropped 15 points to 50%, while their optimism about the wider economy fell 24 points to 21%. The headline reading compares with 55% in August, the highest this year, and is below the 12-month average of 46%.
Hiring intentions held up. According to the Chamber’s figures, a net balance of 46% of Scottish firms expect to increase staff numbers over the next year, two points higher than in August.
Over the next six months, 47% plan to develop new products or services and 45% intend to invest in training their teams. A further 39% are targeting investment in sustainability, the highest proportion of any UK nation or region.
Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking, said, in comments published by Glasgow Chamber of Commerce: “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.”
Across the UK, overall business confidence fell 12 points to 41%, its lowest level since April 2025, after reaching 53% in August. The figure remains above the survey’s long-term average of 30% but is six points below its 12-month average of 47%.
Lloyds said the fall was driven mainly by weaker economic optimism, as businesses responded to higher energy prices linked to renewed tensions in the Middle East. UK economic optimism fell 18 points to 31%, and firms’ trading outlook fell eight points to 50%.
Smaller businesses, with turnover below £5m, saw confidence fall 14 points to 39%. Among larger firms with turnover of £25m to £100m, it rose three points to 75%.
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Amanda Murphy, chief executive of Lloyds Business and Commercial Banking, said: “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.”
The Business Barometer surveys 1,200 businesses each month and has been running since 2002.
