Business activity in Scotland declines in third quarter of this year
Business activity in the Scottish economy declined in the third quarter of this year with the ongoing economic uncertainty expected to have a continued detrimental impact.
Data from the latest Addleshaw Goddard Scottish Business Monitor indicated that nearly all of the headline indicators show that recent Scottish business performance has been weaker than their three-year averages.
The survey was conducted by the University of Strathclyde’s Fraser of Allander institute together with law firm Addleshaw Goddard.
The indicator also revealed that with rising costs and weakening turnover, overall business performance has dampened this quarter.
It has also shown that the net balance for new business remained positive, however, this has decreased compared to last quarter and was the lowest net balance since early 2016.
The report analysing the data has revealed that the Scottish financial sector has achieved the strongest growth in the three months up to August. It has also indicated that in this quarter, activity in retail and wholesale and the accommodation and food services sector is “particularly negative”.
By subtracting the proportion of Scottish businesses which reported a fall from that recording a rise, a total of 5% of those businesses achieved an increase in activity in this quarter, indicating slight growth within the sector.
Professor Graeme Roy, director of Fraser of Allander, said Scottish businesses were remaining resilient but noted the survey showed more than 90% expected the ongoing economic uncertainty would have an “important” or “very important” impact on operations in coming months.
Malcolm McPherson, senior partner at Addleshaw Goddard in Scotland, said: “These figures show firms are not relaxed in spite of incremental growth and remain focused on weathering the storm that is Brexit, scaling back growth ambitions and investment accordingly. There are some exceptions, such as the energy sector, including both traditional oil and gas, and the renewables industry. Energy continues to attract investment.”