SCOTTISH business activity continued to grow in the first quarter in spite of Brexit uncertainty, but expansion slowed and one in four companies north of the Border has reduced investment plans, a survey reveals.

The latest business activity index from Strathclyde University’s Fraser of Allander Institute shows that, subtracting the proportion reporting a decline from that posting

a rise, a balance of six per cent of firms signalled growth in the first quarter. This matched the three-year average, but signalled a slowing of expansion since the fourth quarter of last year.

One in four firms hasreduced investment plans and one-third of the smallest companies reported a fall in sales volumes, the survey shows.

Scottish companies’ overall optimism also fell during the first quarter.

Fraser of Allander director Graeme Roy referred to Brexit as an “ongoing mess”.

Mairi Spowage, head of economic analysis at Fraser of Allander, said: “The outlook for investment remains particularly fragile, with many companies concerned about weak future demand.

“Many Scottish firms are simply unprepared for a potentially imminent disorderly Brexit. Whether you agree or disagree with the decision to leave the EU, a smooth transition

is vital.”

The economy north of the Border grew by 0.3% in the fourth quarter of last year, Scottish Government figures show.

Mr Roy said: “Scottish businesses appear to be remaining relatively resilient to the ongoing political uncertainty. This chimes with last week’s GDP (gross domestic product) data, which showed sustained, if historically weak, growth.”