Confidence among Scottish manufacturers hit a 41-year high during the three months to July as new orders and output surged, according to the latest Industrial Trends Survey from the CBI.
The improvement, one of the strongest on record, came despite new export orders remaining flat in the quarter and without any boost in overseas business anticipated for the coming period.
Domestic work is expected to grow again strongly, with respondents to the CBI’s survey even suggesting they have become slightly less optimistic about exports.
The statistics were revealed amid a greater-than-expected slowdown in orders across UK factories this month.
CBI Scotland director Iain McMillan said upping the nation’s exports was “crucial”.
“Scotland’s manufacturers are feeling upbeat as their domestic order books and output power ahead, reflecting the firming economic recovery,” he said.
“It’s also really encouraging to see more manufacturing jobs being created and businesses planning to increase their investment.
“But firms are reporting weak export orders and are not optimistic about the situation improving.
“Boosting exports is critical to getting Scotland’s economic growth on a sustainable long-term footing.
“With the spotlight on Scotland for the Commonwealth Games, now is the time to pick up the pace.
“We need to see the Scottish Government actively supporting businesses to access export finance and ensuring that Scotland is well connected with strong transport links.”
The study also found a balance of 28% of Scottish firms had increased their headcount during the quarter and planned to up it once more in the coming period.
Around a fifth were contemplating capital investment in machinery and premises.
A balance of 48% of manufacturing businesses said optimism had increased. This is the highest level recorded by the survey since April 1973.
A concurrent UK-wide CBI study found only 2% of UK manufacturers reported an increase in orders this month, compared with 11% in June.