Slowing of growth in Scots economy is an ‘amber warning light’ -SCC

The chambers of commerce said the fall across manufacturing, retail and wholesale, and financial and business could be “a warning of potential declining levels of economic growth” in the Scottish economy.

The SCC’s quarterly economic survey for July to September found tourism enjoyed “an extremely positive summer” in terms of sales revenue, employment and business optimism, with construction enjoying similar positive growth.

And respondents from the construction sector reported growth, despite a decline in public sector contracts.

However, the survey of more than 500 companies, compiled by the Fraser of Allander Institute at Strathclyde University, found businesses working in other key sectors including manufacturing, retail and wholesale, and financial and business services reported a slowing of growth.

The survey indicated that both capital and training investment fell in all sectors except construction.

Also suggested by the results was that low oil prices were continuing to have an impact on the economy, with the performance of oil and gas service businesses dampening results in the financial and business services sector.

Respondents suggested that the low price was not only presenting challenges for businesses in the north east but for the supply chain throughout Scotland.

Other commonly cited business concerns included recruitment difficulties and wage costs, with both the construction industry and retail and wholesale sector experiencing pressure to raise prices due to increasing wage costs.

Scottish Chambers of Commerce chief executive Liz Cameron said: “Although Scotland’s economy is now performing above the level we were at before the recession, we cannot and must not take future growth for granted. It is not inevitable.

“Growth will require a strong focus from the Scottish and UK governments on making Scotland a better and more attractive place to do business, reducing fixed costs such as business rates and intensifying investment in digital and transport infrastructure.”