The latest Scottish Industrial Trends Survey from the CBI shows that the volume of total new orders continued to fall over the past three months. While there was a slight rise in export orders, these were outweighed by a further reduction in the volume of domestic orders. Optimism over the general business climate in Scotland has dipped further; however confidence has risen over the potential for export prospects for the year ahead.
CBI Scotland’s Director, Iain McMillan, said that there was “no getting away from the fact that these latest findings are disappointing, with the slight growth in exports more than outweighed by the continuing marked decline in new domestic orders. That said, the short term outlook looks better, with firms expecting the decline in domestic orders to ease over the next few months coupled with a strengthening in business won from overseas.
“While ultimately the success or otherwise of Scottish industry is in its own hands, both the UK and Scottish administrations can assist by keeping a tight lid on costs that affect firms and by making it easier for companies to compete, invest and export.”
The key findings in the survey are that the total volume of new orders declined for the fourth successive quarter; however growth is expected to resume over the coming three months. Nonetheless, domestic orders are expected to fall further over the next quarter. By contrast, the volume of export orders, output, and numbers of employed are forecast to rise over the next three months.
Scottish manufacturers reported that average unit costs rose over the past three months, and are expected to rise again in the next quarter. Firms expect both domestic and export prices to rise over the next three months.
Investment intentions for the year ahead are mixed with improvements in forecasts for product innovation and for training, but with capital investments in buildings and plant and machinery expected to decline.