Scottish manufacturers ‘return to positive territory’

The Quarterly Economic Indicator found optimism returned to the sector, with export orders strong in the fourth quarter of last year - but the trend lower than expected.

The survey said that a net % balance of +2 was recorded overall for optimism, which marks a return to positive territory after a negative net % balance of -9 was reported in the third quarter of 2016.

It suggested that the increase in optimism could be explained by positive trend balances reported for total sales revenue (+22), total new orders (+24) and total investment expenditure (+16).

The survey added that expectations for next quarter’s sales revenue, employment levels and expenditure on investment are also positive among firms. Positive net % balances were recorded for expected sales revenue (+15), investment (+13), export revenue (+21) and employment (+18).

The Quarterly Economic Indicator is owned and produced by the Scottish Chambers of Commerce Economic Development Intelligence Unit, in collaboration with the Fraser of Allander Institute of the University of Strathclyde. It looks at manufacturing, construction, tourism, retail and wholesale, and financial and business services.

Neil Amner, chair of the Scottish Chambers of Commerce Economic Advisory Group, said: "Overall, these economic results show a positive outlook for key sectors in Scottish economy, particularly for manufacturing, which reported its strongest trend in new orders since 2014.

"However, businesses will be challenged in 2017 by rising prices, tightening cash flow & profitability, the impact of exchange rates on import costs and the burden of business rates."

Amner concluded: "Business focus will be firmly on growth and new market opportunities for 2017, with business keeping a close eye on future trading relationships with the European Union and the rest of the world.”