SCOTTISH manufacturers recorded overall falls in output volumes, employment and new domestic orders in the latest three months, in a dramatic deterioration of fortunes, a survey has revealed.

Growth in new export orders provided a rare bright spot in an otherwise weak industrial trends survey for Scotland published by the Confederation of British Industry yesterday.

The survey also shows sharp drops in planned investment by Scottish manufacturers over the next 12 months in buildings, plant and machinery, product and process innovation, and training and retraining.

Of Scottish manufacturers surveyed, 10 per cent reported a rise in output volumes over the past three months, and 14 per cent experienced a fall. The net four per cent posting a decline in output volumes was in stark contrast to a balance of 46 per cent reporting a rise in the previous three months. And it signalled the first fall in output volumes for Scottish manufacturers since the three months to April 2016.

A rounded balance of six per cent of Scottish manufacturers reported a fall in employment in the three months to October, with 23 per cent posting a decline in the workforce and only 18 per cent recording a rise.

Meanwhile, a net four per cent of manufacturers north of the Border reported a fall in new domestic orders for the latest three months. This was in stark contrast to a balance of 55 per cent posting a rise in incoming domestic orders in the previous survey.

However, a net 19 per cent of Scottish manufacturers reported growth in new export orders in the three months to October. This continued to signal robust growth in new export orders, although it indicated a slight slowing from the rate of increase signalled by the balance of 23 per cent posting such a rise in the previous survey.

CBI Scotland director Hugh Aitken flagged the boost to Scottish manufacturers in overseas markets from the weak pound.

Total new order growth for Scottish manufacturers slowed to a crawl in the three months to October, the CBI survey signals.

A balance of four per cent of survey respondents reported a rise in total new orders in the latest three months, down sharply from a balance of 50 per cent reporting such growth in the previous survey.

Mr Aitken said: “The softening in manufacturing activity that we’ve seen this quarter mirrors the fragility in the Scottish economy. However, the one real bright spot for the sector is exports: the weaker exchange rate continues to work its magic, and there’s a real momentum behind companies that have taken advantage of the boost to competitiveness abroad.”

He added: “While currency factors are obviously having an impact, we know that encouraging and supporting other firms to harness their export potential will be a key driver of productivity growth for the Scottish economy, and this should be a significant priority for government and business moving forward.”

The survey shows Scottish manufacturers expect a resumption of growth in output volumes, new domestic orders and employment in the coming three months.