Scottish business performance remains strong, according to the country’s chambers of commerce, but the effects of low oil prices are being felt.
Liz Cameron, Scottish Chambers’ chief executive, said growth across most sectors was slower than the business community would like in the second quarter, but was welcome.
The exception was the oil and gas service sector, where “the performance and outlook of businesses was noticeably below the levels reported in other service sector firms”.
Businesses across the country were affected, and she said it was clear that low oil prices which had been a feature of the economy throughout 2015 were having a marked impact. Construction was enjoying buoyant trade although the balance of contracts was shifting towards private commercial work.
This was good news, but she said Scottish and UK Governments must answer where large scale public sector construction work will come from once projects such as the Queensferry Crossing and Edinburgh-Glasgow rail electrification are complete.
The chambers’ study, with the Fraser of Allander Institute, concluded that the manufacturing sector looked much more positive, although 25% of respondents had experienced recruitment difficulties.
Skills shortages needed to be tackled, and she said: “With unemployment at 5.5%, access to suitably skilled staff is vitally important for sustained business success, increased productivity and growth.”
Retail and tourism businesses hoped for a successful summer, but Scottish tourism must be competitive with international markets.
“That is why we support industry calls to level the VAT playing field with Europe by introducing a lower rate of VAT for accommodation, tourist attraction admission and restaurant services,” she said
Scottish Business Minister Fergus Ewing described as encouraging the 2.1% increase in Scottish manufacturing exports in the last quarter and 2.7% rise over the whole year.
Challenges remained for some sectors including some engineering sub- industries and smaller exporting sectors.
He said the Scottish Government is committed to strengthening Scotland’s economic links in overseas markets.
He added: “By continuing to invest in and increase exports we can help build sustainable economic growth for Scotland and highlight the country’s position as a place of international trade and investment.”