Business confidence in Scotland fell in the three-month period between the end of July and October, according to a new survey.
The latest Institute of Chartered Accountants in England and Wales (ICAEW)/Grant Thornton UK Business Confidence Monitor (BCM) interviewed 60 senior business professionals in Scotland between July 28 and October 21.
It recorded a confidence score of 7.5, down 5.4 points from the previous three-month period.
Those surveyed were asked to rate their confidence in the economic prospects facing their business over the next 12 months, compared to the previous 12 months.
A score was applied to each response, and an average score calculated.
The respondents also reported that sales volumes had increased by 3.6% year on year in the three-month period, down from the 4.9% rise in the same period a year earlier.
Similarly, profit growth has slowed from 4.9% between July and October 2014, to 2.8% in the latest quarter.
Growth in both sales and profits are projected to slow to 3% and 2.5% respectively over the next 12 months.
Businesses are projecting an increase of 1% on their research budgets over the next year, less than half the rate of increase recorded in the past 12 months.
ICAEW Scotland president Andrew Hewett said: “The fluctuating confidence levels that we have seen this year show that there is still a degree of uncertainty amongst business professionals here in Scotland.
“Whilst the fact that we remain in positive territory is reassuring, this quarter’s decline in confidence should not be ignored, especially as it is coupled with anticipated decreases in spending in various areas such as research and development.
“Whether this is the usual caution we would expect to see in the run up to the Holyrood election, a reflection of the uncertainty caused by cuts in the oil and gas sector, or something more remains to be seen – as does its impact in terms of future growth.”
Grant Thornton UK’s managing partner in Scotland Kevin Engel added: “A decline in sales and profit growth, which in turn has had an impact on research and development investment, is a knock-on effect of growing uncertainty in the Scottish economy.
“The global and domestic oil and gas downturn, as well as the lead up to both last week’s autumn statement and spending review and next year’s Scottish Parliament elections, all contribute to this uncertainty and falling confidence.”
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