CBI predicts fall in Scots manufacturing output

Published on Tuesday 24 October 2006 13:57

SCOTTISH manufacturing output is expected to fall, according to the latest quarterly Scottish Industrial Trends Survey published today by CBI Scotland.

The report finds manufacturers are much less optimistic than they were at the end of the previous quarter in July, with expectations for a slide in domestic orders and a stalling in export order growth.

CBI Scotland also said that investment intentions had been scaled back since July as signs of excess capacity appeared and that could see a "modest easing in staff numbers".

Total new orders grew slowly over the last three months after particularly strong growth in the previous two surveys," the employers group said.

But it added: "The weakening in total demand stems wholly from a fall in the volume of domestic orders."

In contrast, export orders increased at the fastest rate for over a decade. However, firms do not expect this to continue after swings in exchange rates.

Iain McMillan, director of CBI Scotland, said: "The indications . . . are that the strong activity recorded by Scottish industry over the past few years may not be sustained. Optimism about the general business situation and prospects for exports have dipped."