FEWER than one in five businesses expect to increase exports, despite Scottish economic growth continuing into the final months of 2018, a report has found.

Scottish Business Monitor, from Strathclyde University’s Fraser of Allander Institute, found the total volume of business rose for 35% of Scottish firms covered by the monitor from October to December.

But the report found less than 20% of firms are forecasting growth of exports.

Fewer than a fifth of firms plan to increase capital investment, with a net balance of -4% of businesses planning to do so, a rise of 7% on the previous quarter.

Some 80% of respondents identified weakening demand as a major concern, while just over half of firms expressed concern about exchange rates.

Mairi Spowage, the institute’s head of economic analysis, said: “This latest FAI Scottish Business Monitor shows that the Scottish economy has continued to grow in the final few months of 2018.

“Our headline FAI Business Activity Index slipped a little from a net balance of 16% in Q3 to 10% in Q4.

“And while this is above the long-term series average, it is lower than businesses were expecting just three months ago. Small businesses appear to be the most gloomy.

“Also of concern is the fact that businesses in Scotland are reporting not just a decline in investment – as has been the case now since early 2017 – but also a modest fall back in export activity.”

Graeme Roy, institute director, said: “Scottish businesses appear to be remaining relatively resilient to the ongoing political uncertainty.

“But they will be awaiting next week’s Brexit vote with trepidation. Through no fault of their own, many Scottish firms are simply unprepared for a disorderly Brexit.