Scotland’s economy could be in for “a bumpy ride” amid reports of subdued activity in three of its most important industrial sectors, accountants have warned.
Construction, manufacturing, and oil and gas have all reported reduced activity, while business optimism has plummeted, BDO LLP said.
Growth expectations among businesses have meanwhile fallen for the tenth month in a row.
Businesses in Scotland and across the UK fear the economy “is not going anywhere while the European Union referendum result remains unknown”, according to the accountancy firm’s latest Business Trends Report.
But the problems in Scotland indicate a deeper concern than simply short term political uncertainty, it said.
BDO’s output index – which reflects companies’ experience of orders on hand – has fallen below the level that indicates long-term trend growth for the first time since 2013.
The employment index – which shows firms’ intentions to hire – has dropped well below the level seen in the same month last year.
Martin Gill, head of BDO LLP in Scotland, said: “These figures highlight the dilemma companies face at the moment.
“Uncertainty – both about the EU referendum but also wider economic concerns – has contributed to businesses’ expectation that economic growth will fall behind its long-term trend for the first time in nearly three years.
“There have been reports of subdued activity in the construction sector, in manufacturing, and obviously in the oil and gas sector.
“These are three very important contributors to the Scottish and wider UK economy and all three reporting reduced activity is a concern.
“A reduction in output and optimism cannot just be put down to uncertainty due to the EU referendum and may have some more deep-rooted causes.
“We need to see greater investment and higher productivity to improve capacity, encourage growth and ultimately drive up living standards.
“If businesses don’t foresee growth and a more optimistic outlook in the next few months then we could be in for a bumpy ride this autumn.”
The pessimistic forecast comes after new Economy Secretary Keith Brown predicted “good times ahead” for the oil industry.
