More than half of Scottish manufacturers remain optimistic about the future growth of their businesses despite increasing uncertainty over trading conditions.
The latest manufacturing and engineering survey conducted by Henderson Loggie, in conjunction with MHA and Bank of Scotland, shows 59% of respondents expect to grow this year.
The survey shows the majority (57%) of Scottish firms surveyed believe uncertainty over trading tarrifs could be a barrier to growth.
36% of manufacturers expect staff numbers to increase in the next 12 months, yet 55% of respondents report having difficulty recruiting employees with the relevant skills.
Gavin Black, partner and head of manufacturing at Henderson Loggie, said: “The survey shows an element of resilience amongst companies in the sector.
“The majority of respondents are forecasting growth in some form in the coming year which they predict will come from increased demand from customers, expansion of product offerings, new markets overseas and increased productivity through lean manufacturing practices.”
He said while conditions “remained challenging” firms will have to excercise rigorous risk management to mitigate the effects of increases in raw material costs and risks from technological change.
Mr Black added: “Recruitment continues to be a concern, and for some companies this is exacerbated by the uncertainties surrounding Brexit which could create an even greater skills shortage than already exists.”