BUSINESS activity has continued to grow in Scotland in the first quarter of 2019 despite continuing uncertainty over Brexit.

The latest Scottish Business Monitor compiled by the Fraser of Allander Institute (FAI) shows that its business activity index remained positive at +6% in the first three months of 2019.

While positive, this was a drop on the previous quarter of 4%.

The report also found that

more than one in four firms have reduced their investment plans and one third of the smallest companies reported a decline in the volume of sales.

Staff availability also remains a pressing issue for most firms with almost three-quarters saying that this was an important or very important issue.

Mairi Spowage, head of economic analysis at the institute, said: “The latest FAI Scottish Business Monitor shows that despite the current uncertain environment, the Scottish economy continued to grow in the first quarter of 2019.

“However, overall optimism slipped again compared to three months ago.

“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.”

Professor Graeme Roy, director of the Fraser of Allander Institute, said: “Scottish businesses appear to be remaining relatively resilient to the ongoing political uncertainty.

“This chimes with last week’s GDP data, which showed sustained, if historically weak, growth.

“In 2018, Scotland grew broadly in line with the UK but overall Scotland’s longer term growth rate has been slipping over the last decade.

“It’s deeply unfortunate that a debate on the causes and implications of Scotland’s growth performance is being crowded out by the ongoing mess that is Brexit,” she added.

The Scottish Business Monitor regularly assesses the environment for firms in terms of competition, access to credit, inflation, investment and exports, and capacity.