SCOTTISH manufacturers have enjoyed faster output growth and increased their rate of hiring in the latest three months, but inflationary pressures in the sector are mounting and optimism is falling, writes Ian McConnell.

The stronger output and employment picture is revealed in the latest quarterly survey from the Confederation of British Industry, which also shows growth in domestic and export orders for Scottish manufacturers slowed in the latest three months.

And the survey signals Scottish manufacturers plan to reduce investment in plant and machinery sharply over the next 12 months.

Some economists have highlighted a view that uncertainty over Brexit is weighing on overall business investment in the UK as a whole.

The CBI’s industrial trends survey shows that Scottish manufacturers raised both domestic and export prices at the fastest pace since July 2013 in the latest three months.

And Scottish manufacturers raised headcount at the sharpest rate since July 2014.

Subtracting the proportion experiencing a fall from that reporting a rise, a net 19 per cent of Scottish manufacturers posted a rise in output volumes for the three months to April. This signals a sharp acceleration, with a balance of three per cent having reported an increase in output volumes in the preceding three months.

However, a net three per cent of Scottish manufacturers reported a fall in optimism about the business situation. In the previous quarterly survey, a balance of 30 per cent had reported a rise in optimism.

CBI Scotland director Hugh Aitken said: “Scottish manufacturing output has strengthened and employment in our factories has also risen at a decent rate.”