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Manufacturers see solid rise in quarterly sales

SCOTTISH manufacturers enjoyed further solid growth in sales in the fourth quarter of last year, but are relatively downbeat about the prospects for profitability, a survey has revealed.

progress: Many Scottish manufacturers achieved a rise in sales in the fourth quarter. Picture: Colin Mearns
progress: Many Scottish manufacturers achieved a rise in sales in the fourth quarter. Picture: Colin Mearns

The survey, published today by British Chambers of Commerce, shows the services sector was much weaker in Scotland than in other parts of the UK.

But Garry Clark, head of policy and public affairs at Scottish Chambers of Commerce, highlighted the fact that the survey sample of services companies north of the Border included a high proportion of retailers. He noted that the business services sector, which includes accountancy and law firms, was not represented in the sample at the moment, but added that this would be changed later this year.

Mr Clark said: "At the moment, there is probably quite a lot of retail in there. What it tends to do is underplay the strength of the sector as far as Scotland is concerned, certainly in comparison with the rest of the UK."

Subtracting the ­proportion of respondents reporting a fall from that experiencing a rise, while adjusting the findings to give larger companies a greater weighting, British Chambers' survey shows a balance of 33% of Scottish manufacturers achieved a rise in sales in the UK market-place in the fourth quarter. This was an improvement from 28% in the third quarter, although it was adrift of a weighted balance of 36% for the UK as a whole.

Only a weighted net 2% of Scottish manufacturers believed profitability would improve over the next 12 months. This was way adrift of a corresponding UK-wide average of 51%, although it was an improvement on the weighted net 17% of Scottish manufacturers forecasting a deterioration in profitability on a 12-month view in the previous quarterly survey.

A weighted net 5% of Scottish services companies anticipated a deterioration in profitability over the next 12 months, in contrast to the corresponding balance of 45% in the UK as a whole anticipating an improvement.

Meanwhile, a weighted balance of 20% of Scottish services companies achieved a rise in domestic sales in the fourth quarter. This was well adrift of a UK-wide average of 38%, and it was the worst showing of any of the 12 nations and regions covered by the survey, but it was up from a corresponding weighted balance of 8% in the previous quarterly survey.

Liz Cameron, chief executive of Scottish Chambers, said: "The most encouraging aspect of the results...was the strength of domestic sales for manufacturing and service firms, with the balance figures for both sectors now firmly in positive territory.

"Overall, the results are stronger than they have been for a number of quarters, but there are still some concerns, such as weakness of the profitability confidence balances."

Only a weighted net 1% of ­Scottish services companies raised employment in the fourth quarter. And services companies north of the Border signalled the employment picture would be stagnant in the current quarter.

A weighted balance of 30% of Scottish manufacturers increased employment in the fourth quarter. And a weighted net 28% ­anticipated an increase in the current quarter.

These employment readings for manufacturers in Scotland were only slightly adrift of those for the UK as a whole.

Meanwhile, a weighted balance of 21% of Scottish manufacturers said export sales rose in the fourth quarter. This was adrift of a figure of 35% for the UK as a whole.

Ms Cameron said: "This survey indicates Scotland's economy is continuing to show signs of strong growth towards the end of 2013 and our hope is that this can be improved upon during 2014."

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