By Daniel Hunter

The Scottish Chambers of Commerce have released their Business Survey results for the first quarter of 2013. The survey, conducted in conjunction with the University of Strathclyde’s Fraser of Allander Institute, reports an encouraging start to the year in the manufacturing sector, with some positive signs in construction and, to a lesser extent, tourism.

However low demand remains a major constraint to increased activity in most sectors and the barrier to a return to trend growth.

“Our latest survey paints a picture of continued fragility in the Scottish economy with weak levels of domestic and consumer demand," Garry Clark, Head of Policy and Public Affairs at Scottish Chambers of Commerce, said.

"As we warned at the beginning of this year, there are clear signs that the economy is continuing to bump along a path of little or no growth and further action may be required by government to stimulate demand over the course 2013.

“There are some positives to take out of this quarter’s figures, particularly the renewed strength of manufactured exports which has resulted in an upturn in optimism in the manufacturing sector. We also welcome a second quarter of improved results in the construction sector, although this is beginning to highlight recruitment difficulties re-emerging in this sector. More unexpected was a return to signs of positive optimism in the tourism sector, though discounting is again evident.

“The majority of businesses across all sectors, except in oil and gas identify the lack of demand as the key blockage to future growth and if Scotland is to return to trend levels of growth of 1-1.5% per year or more, then further efforts will be required by government at all levels to stimulate demand. The Scottish Government and, more recently, the UK Government have now recognised the value of focusing resources on capital spending and investment. This must be accelerated and government must also look at how it can reduce the cost base for business, including action to reduce the impact of business rates.

“Businesses will find opportunities where they can, but the muted signs of improvement in our economy as we enter the spring can only be sustained and strengthened when businesses and consumers alike have the confidence to spend and invest.”

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