Scottish economy ‘robust’ despite uncertainty over UK’s Brexit future

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A new report suggests the Scottish economy is in a strong place despite increasing concerns over the UK’s post-Brexit future.

A survey by the Scottish Chambers of Commerce found robust financial results across the sectors, although reported declining optimism amongst firms in the third quarter at 21% – up from 15% in the previous period.

Investment expectations for the future are also slowing with the construction, business services, manufacturing and tourism sectors all reporting declining investment levels.

Despite this, 43% of firms surveyed still reported increased overall revenue, with only 17% reporting a decrease.

The manufacturing sector posted its first negative result for optimism and business confidence since 2016, despite a reasonably strong set of financial results, with the rising cost of raw materials cited as a growing pressure.

Neil Amner of Anderson Strathern and chair of the Scottish Chambers of Commerce Economic Advisory Group, welcomed the findings.

He said: “Our survey results for the third quarter of 2018 suggest that the Scottish economy continues to be resilient, but firms are becoming cautious as uncertainty grows around the future trading environment with the European Union”.

Findings published by the group indicated 62% of firms across the UK have not conducted a Brexit-related risk assessment. 

This figure is higher in Scotland, at 67% of surveyed firms. 

It was reported 21% of firms across the UK intend to cut investment levels if a “no-deal” scenario comes to pass.

“It’s difficult for firms, especially smaller businesses, to prepare without clarity on future arrangements. It is critical that the UK Government steps up to the plate to provide the certainty that business needs,” said Mr Amner.

“Business communities need to see the UK Government working constructively with the whole of the UK and our EU partners to deliver certainty for business.”

Professor Graeme Roy, director at the University of Strathclyde’s Fraser of Allander Institute, added: “This survey is further clear evidence of the importance of securing a smooth Brexit transition to protect Scotland’s economy.

“Whether you agree or disagree with the decision to leave the EU, it is essential that we have an orderly transition. 

“Crashing out of the EU in March next year threatens to severely impact on businesses right across the Scottish economy.”

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