Rising costs are stalling Scotland's already fragile economy
A new survey outlined the threat of rising costs, including the price of materials and transport, to Scotland’s delicate economy.
The Scottish Chambers of Commerce survey, which questioned 200 firms in five sectors and covered the first quarter of 2011, suggests the Scottish economy stalled during that period.
The survey also found it likely that rising costs would be passed onto customers by cash-strapped firms.
Expectations for the second quarter remained weak, alongside a decrease in business optimism in all sectors for the first three months of 2011.
Rising costs will likely be passed onto customers by cash-strapped firms.
The construction industry remained particularly weak amid widespread depressed demand. More than half of firms reported downward trends in domestic/house-building orders, with a further two-thirds reporting fewer public sector contracts.
Export-led demand in manufacturing continued improving but could not offset a decline in domestic orders.
Garry Clark, head of policy and public affairs at Scottish Chambers of Commerce, said:
"Exports continue to support manufacturing activity, and this again underlines the importance of utilising Scotland's international reach to the best advantage for our businesses."