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BUILDING THE RECOVERY

Scottish Chambers of Commerce have today (Thursday) released their Business Survey results for the third quarter of 2009. The survey, conducted in conjunction with the University of Strathclyde’s Fraser of Allander Institute, reveals a marked upturn in both business optimism and performance across a range of sectors, but signs of recovery remain fragile and are far from universal.

Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

“Our latest survey provides strong evidence that the first signs of recovery we noted in our July survey are developing into something more tangible. However this recovery remains fragile and is not evident in all sectors.

“The manufacturing sector has reported a significant increase in optimism, supported by positive trends in both new orders and expected orders. But domestic demand remains weak and it is exports that are driving the recovery. This reinforces our view that Scottish businesses must increasingly look outwards for new opportunities and the Scottish and UK Governments must ensure that our infrastructure and fiscal policies are geared towards delivering a competitive environment for our firms as they seek new international opportunities. But investment trends remain weak, and this is a longer term concern if our manufacturing sector is to remain competitive. Demand, confidence and activity remain weak in construction.

“The tourist sector appears to have had a good summer with strong trends in domestic demand, although overseas demand may be a little weak, particularly in the Year of Homecoming. Occupancy rates are similar to 2008, but many tourist businesses have had to discount room rates and further discounting is likely over the winter months. Many in the hospitality sector are having to work harder in order to achieve these results and the ongoing fragility of the recovery highlights the need for continued investment in both marketing and infrastructure in order to ensure an economic environment suited to growing our tourist sector.

“Businesses recognise that the public finances will dictate that Governments at all levels will have to act to reduce overall spending levels, whilst at the same time tax rates are likely to increase. In order to deliver for Scottish business, Government policy must be focused on facilitating the conditions in which businesses can thrive and generate the wealth to power Scotland on the path to prosperity.”

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