SCOTLAND’S economy has been boosted by the weak pound caused by the Brexit vote, with the first positive swing in export numbers in two years, according to a new report.
The latest Royal Bank of Scotland Business Monitor, conducted by the Fraser of Allander Institute, also found companies looking forward to even better conditions later this year.
However the survey of more than 400 Scottish firms found most had been hit by the flip-side of the slide in Sterling since last year's Leave vote, with inflation driving up costs and capital investment sharply down.
Despite improvements for exporters and tourism, growth remained “fragile”, it said.
GDP figures due on Wednesday will show whether Scotland entered a recession, defined as two consecutive quarters of negative growth, at the start of 2017.
The RBS report found 27 per cent of businesses saw an increase in export activity in the three months to June, compared to 18 per cent reporting a decline.
The difference of +9 per cent was the first such positive balance in two years.
Growth was strongest in the Highlands & Islands but weak in the North East.
However the report found firms in all parts of Scotland expected business volumes to grow, including a net balance of +12 per cent in the North East, suggesting the “prolonged hangover in the region since 2014’s oil price collapse is coming to an end”.
RBS chief economist Stephen Boyle said: “Scotland’s economy continued to grow in the second quarter, albeit very modestly.
"More encouraging is the outlook, with a greater proportion of businesses expecting higher levels of activity in the second half of the year.
“Inflationary pressures remain strong and, with wage growth weak, households will be under pressure; consumer-facing sectors will see a further weakening in demand.
“Prompted by the weaker pound and stronger growth in the euro area, the return of export growth is welcome but falling business investment is a concern for longer-term growth prospects.”
Professor Graeme Roy, Director of the Fraser of Allander Institute, added: “Scottish businesses are remaining resilient in the face of challenging trading conditions.
"Inflationary pressures are an increasing concern but the fall in the value of Sterling is providing a welcome boost for Scotland’s tourism sector and exporters.”
After a Fraser of Allander report last week warned of persistent problems in the Scottish economy, economy Secretary Keith Brown welcomed the new data as “good news”.
He said: "These encouraging economic signs mean it is more important than ever that we avoid an extreme Brexit, which threatens jobs, investment and living standards – and the Scottish Government will continue to do all we can to retain our place in the world’s biggest single market.”
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