The Bank of Scotland has found business confidence is at its lowest level since the financial crash.
In the last month, overall confidence for firms in Scotland – optimism for their own business and the Scottish economy – fell 43 percentage points to -50%.
The latest Business Barometer – a survey of 1,200 UK firms, including 93 in Scotland – found confidence in their own business prospects was -29%, compared with -4% in March.
A quarter (25%) of Scottish businesses were operating below half of their capacity, compared to 43% UK-wide, while 35% reported operating at above 50% of capacity.
Almost a third (32%) were not operating at all.
Fraser Sime, the Scottish regional director at Bank of Scotland Commercial Banking, said: “Coronavirus has caused major disruption to businesses right across the UK.
“In particular, the impact is being felt by those operating in industries that are temporarily shut down, including hospitality and tourism – two sectors especially important to the Scottish economy.”
He added: “Bank of Scotland is committed to helping businesses across all sectors and we will work together to weather this storm.
“We have set aside £2 billion of arrangement fee-free finance to help businesses directly affected by Covid-19.”
Across the UK, overall confidence fell 38 percentage points to -32%, with the manufacturing sector experiencing the sharpest decline, falling 46 percentage points to -35%, followed by the retail sector at -33%, the construction sector at -20% and the services sector on -22%.
Paul Gordon, managing director for small and medium enterprises at Lloyds Bank Commercial Banking, said: “April has shown the unprecedented impact of the shutdown for businesses across the UK with trading prospects and overall confidence free-falling across the regions.
“During this time it is important that businesses take steps to access the Government schemes such as tax deferment, rates reductions, small business grants and the job retention scheme, and the various finance options available to them, so that they can survive through this crisis and be best placed to open their doors again in the months ahead.”
Hann-Ju Ho, a senior economist at the bank, said: “The results in April demonstrate the full impact of the measures taken by the Government to shut down large parts of the economy to help contain the pandemic, with sentiment now matching the all-time low of December 2008.
“There are tentative signs that China’s economy is stabilising as it starts to ease lockdown measures and that may serve as a template for the rest of the world.”