Limited signs of improvement in the manufacturing and construction sectors were the only glimmers of light in otherwise gloomy data for Scotland’s business sector.
The Scottish Chambers of Commerce (SCC) fourth-quarter survey called on the Scottish Government to maintain a clear focus on tackling the barriers to growth and improving support for business after reporting further ‘below trend’ growth.
The survey, conducted in conjunction with Strathclyde University’s Fraser of Allander Institute, demonstrated continued weaknesses in activity across much of the Scottish economy.
The organisation warned little or no improvement could be expected for the service sector as a result.
Garry Clark, head of policy and public affairs at the network, said Scottish businesses continued to be dogged by difficult trading conditions, and the survey results gave little reason to expect any change during the first six months of this year.
While there had been marginal improvements in performance and outlook across manufacturing and construction, the uplift came against a background of “poor expectations” at the end of last summer.
“The reality is that, in most cases, expectations are little or no better than they were a year ago,” he said.
The results were echoed by a new survey carried out by employers’ organisation CBI Scotland, which showed a further weakening in orders and output around the turn of the year
The group’s latest Scottish Industrial Trends Survey said the volume of total new industrial domestic orders and output fell for the seventh successive quarter, while export orders in the sector declined for the first time in three years.
However, it also suggested modest growth would resume over the next three months.
CBI Scotland director Iain McMillan said the results were “disappointing” and showed the manufacturing industry in Scotland still faces major challenges.
“Although expectations for domestic orders and exports over the next three months are positive, the numbers do not indicate any real strength of recovery going forward,” he said.
“Scottish industry needs to fight hard for every sale, and companies need to ensure that they are internationally competitive going forward.
“There is much that the Scottish Government can do, too.”
Research by the Federation of Master Builders also painted a pessimistic picture for the construction industry.
The FMB data found employment in the sector had continued to fall in the last three months of 2012, while companies were facing an increase in their overheads.
The deterioration in workloads in Scotland was the second worst in the UK.
The SCC survey also looked at other sectors of the economy which suffered during the latter months of last year.
Mr Clark said: “The retail and tourism sectors continue to suffer from weak consumer demand, and already in 2013 the pattern of extensive discounting and rate- cutting, together with outlets closing, is all too clear,” said Mr Clark.
He added that “2013 could be the year when the Olympic dividend is finally achieved, following last year’s shop window to the world”.
business@thecourier.co.uk