Scottish economy 'growing slowly' since Brexit vote

The survey suggested a a pick-up in Scottish construction activity in the third quarter

A survey of nearly 400 firms has suggested the Scottish economy has been growing since the Brexit vote - but only at a slow pace.

Firms reported generally weaker trends in both performance and optimism than last year.

But the Scottish Chambers of Commerce survey found a pick-up in construction activity in the third quarter.

Optimism in financial and business services also "returned to positivity" for the first time in more than a year.

Manufacturers reported a higher trend in export growth than in the previous quarter.

Tourism businesses also reported positive growth over the summer period, but at a lower rate than they enjoyed the previous year.

Meanwhile, the retail sector recorded its lowest optimism levels for three years.

Recruitment difficulties

Overall, the Quarterly Economic Indicator suggested Scottish businesses were continuing to create new jobs, but recruitment difficulties remained widespread.

The survey was carried out between 22 August and 12 September.

In construction, the survey suggested both housebuilding and public sector contracts returned to growth, with almost 45% of all businesses in the sector stating that total sales had increased.

Oil and gas service sector businesses continued to report declining results, but the rate of decline was "much more shallow" than at any other time over the past year.

The survey indicated an improvement in the fortunes of oil and gas sector businesses

While there were signs of export growth for manufacturers, the survey suggested capital investment was slowing and cash flow declining.

Responses from the retail sector suggested that online was the only growing sales channel. Some said they were expecting future sales revenues to improve but question marks remained over profitability and margins.

The tourism industry saw strong trends in international visitors, suggesting they could be taking advantage of the favourable exchange rates following the decline in the value of the pound since June.

Economy 'growing slowly'

Neil Amner, chairman of the Scottish Chambers of Commerce Economic Advisory Group, said: "The overall picture painted by these results is one of a Scottish economy that is growing, but growing slowly.

"Within that we are seeing some sectors such as construction and tourism gaining ground over the summer period, whilst the retail sector in particular appears to be pessimistic, with retailers telling us that the weakening of sterling has led to rising costs which, in turn, is impacting on profit margins.

"We know that the Scottish economy has grown at a generally far slower pace than that of the UK as a whole since the early part of 2015 and there are a range of factors which have influenced that, including the impact of the collapse of global oil prices, which began in 2014.

"Despite the fact that we are now beginning to see far less negative results from businesses in the oil and gas sector than at any time in the last year, we expect continued consequences of low oil prices to be manifested in the short to medium term."

Earlier this week, official figures showed output from the Scottish economy grew by 0.4% in the second quarter of this year but lagged behind the UK as a whole.

Scotland's chief statistician estimated services grew by 0.5% and production by 0.3% between April and June, while construction contracted by 1.9%.

UK output as a whole grew by 0.7% over the same period.