SCOTLAND’S business activity has continued to grow in the second quarter of 2019 despite heightened Brexit uncertainty.
The latest Scottish Business Monitor compiled by the Fraser of Allander Institute shows that its business activity index remained positive at +14% in quarter 2 of 2019. The index highlights that 40% of firms experienced a rise in business activity.
The Fraser of Allander’s report shows that the trends in investment continued to decline in the second quarter of this year as businesses remain hesitant in committing to new investment due to the lack of clarity on the economy’s direction.
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The report also finds that net balances in exports slumped to its lowest level in three years, with only one in five firms indicating a rise in export activity in the three months to May.
Head of economic analysis at the institute, Mairi Spowage, said: “The latest FAI Scottish Business Monitor shows growth in the Scottish economy despite continued uncertainty.
“In particular, business activity
is up from the first quarter of this year. Over the last quarter there has been fewer businesses worrying about future demand however, it remains the greatest concern for Scottish businesses.
“The slowdown in investment has persisted and the downward trend in exports appears to be disproportionately affecting smaller businesses.
Businesses still remain unprepared for a no-deal Brexit and the recent jump in political uncertainty is not going to help over the next few months.”
Director of the Fraser of Allander Institute, Professor Graeme Roy, added: “The headline measure of business activity is at +14% - higher than three months ago and up on the year. Businesses appear to remain resilient against the continued Brexit uncertainty.
“Next week we will find out Scotland’s GDP figures for Q1 2019, which are likely to show a degree of volatility as firms stockpiled in the run up to the potential no-deal deadline of March 29.
“Little has happened since then to give Scotland’s business community any confidence that policymakers at Westminster have a credible plan for taking the UK out of the EU that does not involve major disruption to our economy.”
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