Business Trends survey shows dip in manufacturers’ confidence

Optimism among Scots manufacturing companies dipped last month for the first time in more than a year.

The latest Business Trends survey by BDO found challenging operating conditions in the sector threatened confidence, with firms less optimistic in June about their prospects for the coming six months than they were in May.

However, at 119.5, the optimism measure remains strongly positive and well above the 100 marker indicating long-term growth.

In contrast there was brighter news for the services sector last month, which saw its optimism rating push marginally ahead to 101.9 from May’s figure.

Martin Gill, partner and head of BDO in Scotland, said a series of issues were weighing on manufacturers’ minds.

“Manufacturers are under growing pressure from a shrinking pool of skilled workers, and potential input cost increases from oil price rises, for example,” Mr Gill said.

“There may also be borrowing concerns if interest rates rise substantially, perhaps limiting their growth ambitions.

“However, it is important to note that confidence in the sector is high, and firms are still looking to expand well above their long-term trend rate over the next six months.”