RECRUITMENT challenges and “modest” business investment intentions amid heightened uncertainty signal economic growth north of the Border may remain “fragile” in coming months, a survey from Scottish Chambers of Commerce concludes.

Neil Amner, who chairs SCC’s economic advisory group, warned: “The need for a practical immigration policy to arise from the Brexit negotiations, which puts business first, is made even more critical by these conditions.”

The survey flags “significant concern” among companies about rising raw material prices. Many surveys signal raw material prices have been fuelled by sterling’s post-Brexit vote weakness.

SCC says firms continue to display “resilience in the face of economic uncertainty”.

The survey, in conjunction with Strathclyde University’s Fraser of Allander Institute, shows a rise in confidence among Scotland’s manufacturing, and financial and business services firms. The retail sector showed improvement, from a low base.

Professor Graeme Roy, of Fraser of Allander, said: “With heightened levels of uncertainty, it is unsurprising investment intentions remain modest, whilst the tight labour market means that many firms continue to report difficulties in recruiting staff.”

Mr Amner, who also called for government to continue investing in the talent and skills base through initiatives including Developing the Young Workforce, said: “Recruitment difficulties have continued to worsen for a number of sectors, particularly manufacturing, tourism, and financial and business services, with the latter two sectors close to the highest levels ever measured in the survey.”