SCOTTISH manufacturers have suffered a tumble in domestic and export orders and a sharp rise in costs in the latest three months, and have reduced employment at the fastest pace since January 2012, a survey has revealed.

They expect to cut staffing at an even faster pace in the coming three months, amid the economic and political uncertainty in the wake of the Brexit vote, the survey from the Confederation of British Industry shows. The drop in export orders, which follows a rise in the preceding three months, signals the pound's plunge following the Brexit vote failed to boost the overseas sales of manufacturers north of the Border in the August to October period.

Amid sterling weakness, Scottish manufacturers’ costs rose at the fastest pace in two years in the three months to October.

Scottish manufacturers also reported a drop in optimism about the general business situation in the latest quarterly survey.

Of the 37 Scottish manufacturers surveyed, 31 per cent reported a fall in domestic orders and only 23 per cent achieved a rise. The rounded net nine per cent reporting a fall in domestic orders contrasted with a balance of 23 per cent posting a rise in the previous quarterly survey.

Meanwhile, a net 11 per cent of Scottish manufacturers reported a drop in export orders for the three months to October. In the preceding three months, a balance of 24 per cent had reported a rise.

A balance of 13 per cent of Scottish manufacturers cut employment in the three months to October, after the sector increased staffing in the May to July period. And a net 26 per cent projected a cut in the coming three months.

Although a net eight per cent of Scottish manufacturers reported a rise in output volumes in the three months to October, this signals a sharp slowdown in the rate of increase. In the previous survey, a balance of 35 per cent of respondents reported a rise in output volumes.

Scottish manufacturers predict a rise in export orders in the coming three months. But they expect a further fall in domestic orders. They forecast growth in output volumes will grind to a halt in the coming three months.

CBI Scotland director Hugh Aitken said: “It had been hoped that Scottish manufacturers would see a continuation of the recovery seen in the second quarter of this year, but our latest survey shows order volumes and employment slipping over the last three months."