SCOTTISH manufacturers experienced a strong second quarter but those in the service sector had more mixed fortunes, a closely watched survey has said.
The British Chambers of Commerce, which publishes its quarterly research today, said many indicators it monitors had fallen back between April and June including all those covering exports and investment.
While it acknowledged the first three months of the year were particularly strong the group warned it may downgrade its estimate of 3.1 per cent growth in GDP this year unless things pick up again. The research, which collates responses from more than 7,000 businesses, said concerns over interest rates had also risen.
David Kern, chief economist at BCC, said: "Rises in sterling are making UK exports more expensive. Uncertainties around early interest rate increases are adding to the difficulties, and our excessively large current account deficit poses potential risks. UK growth cannot permanently rely on rising consumer spending, which is driven by a buoyant housing market, and on excessive household debt. Unless investment and net exports make bigger contributions to growth, the recovery could stall."
In Scotland, manufacturers were shown to be performing strongly with increases in domestic orders and sales. While there was some slowdown in export sales order books remained in good health.
Employment intentions dropped in the period with the number of firms expected to hire in the current quarter well down.
The research subtracts the proportion of respondents experiencing a fall from those recording a rise then adjusts the findings to give larger businesses a greater weighting. In manufacturing, the weighted balance of quarter-on-quarter domestic sales rose from 31 to 50, with export sales going from 28 to 23 but orders rising from 24 to 39. In the service sector domestic sales reversed from 3 to -5 with domestic orders dropping from 13 to 3. Liz Cameron, chief executive of Scottish Chambers of Commerce, described the service sector results as a concern.
Across the UK three manufacturing balances were at all time highs although that was down from the six categories at that level between January and March. No service balances were at their highest ever level in the most recent quarter, compared to two in the first quarter of 2014.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article