Scotland business

Scottish business 'growing in confidence'

Manufacturing plant
Image caption The survey suggested manufacturing orders rose at their highest rate since the third quarter of 2007

Business confidence is rising across all sectors in Scotland but the economic recovery remains frail, a survey of firms has suggested.

The Scottish Chambers of Commerce (SCC) found manufacturing orders rose in the third quarter at their highest rate for six years.

Manufacturers and retailers also forecast a rise in profitability in the first half of next year.

But SCC warned it was "by no means yet certain" the recovery can be sustained.

On Wednesday, figures released by the Scottish government indicated Scotland's economy grew by 0.6% between April and June this year - the fourth consecutive quarter of growth north of the border.

Labour market statistics also showed employment in Scotland at its highest level for five years.

SCC's latest business survey, which is conducted in conjunction with the University of Strathclyde's Fraser of Allander Institute, found employment trends improving in all main sectors in the third quarter of 2013.

Manufacturing orders also rose at their highest rate since the third quarter of 2007.

Construction orders on balance declined, but levels remained higher than during the same period a year ago.

The survey also suggested the long-term decline in retail sales had ended.

The good summer boosted visitors to Scottish hotels, with more than half of businesses reporting a rise in guests.

'Encouraging signs'

SCC chief executive Liz Cameron said the latest survey showed "welcome signs of growth" for Scotland's economy.

She said: "Compared to a year ago, business confidence has increased and all business trends in all sectors are stronger, showing positive steps towards sustained economic growth.

"There are encouraging signs of increased consumer activity, with improving retail sales and stronger tourism trends. This is good news for Scotland and for Scotland's businesses.

"The manufacturing sector has seen orders rise at the highest rate since 2007, construction respondents reported a rise in investment intentions and the long-term decline in retail sales ended, with retailers reporting increased optimism for the first time since 2006."

She added: "However, economic vulnerability remains.

"Much depends on continuing positive trends in our major export markets and on speedy resolution of any remaining US fiscal issues.

"Importantly, prices and wages remain disconnected and so household incomes continue to be squeezed.

"This creates risk in reliance on a consumer-driven economy, which is why government rhetoric about investment and sustainability needs to become a reality to enable continued growth and confidence."

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