Page last updated at 00:05 GMT, Thursday, 16 July 2009 01:05 UK

New optimism for tourism business

St Andrews
In tourism, optimism was the highest for 18 months

The Scottish Chambers of Commerce has said that many companies could have a better than expected summer.

A survey for the business organisation has suggested that confidence was returning to many firms.

In tourism, optimism was the highest for 18 months and in wholesale distribution, the results were the best since 2006.

However, the report has said profits remain under pressure and the worst of the recession may not be over.

The chamber's chief executive, Liz Cameron, said: "The sharp decline in the Scottish economy over the previous nine months appears to be coming to an end and there are more encouraging signs across most sectors."

The survey has highlighted positive changes for tourism businesses.

Although visitor numbers were down, the fall was not as sharp as in the previous two quarters.

Occupancy rates rose from 54.5% to 71.5% although the chamber said there had been heavy discounting of room rates.

The encouraging signs in tourism led to an increase in optimism among firms taking the measure to its highest rate for 18 months.

Wholesale distribution companies also appeared more confident than they have been since 2006, with both sales flow and cash flows showing an improvement.

According to the survey, there was also a better than expected performance from manufacturing companies.

Although orders from Scotland and the rest of the UK were still weak, they were better than the previous two quarters and export orders rose 1.6%.

Many firms still expected to cut jobs over the next three months, although at a slower rate.

Worst over

Few companies reported difficulty in recruiting.

The number of respondents increasing pay in the 2nd quarter ranged from 0% in construction and to 35% in manufacturing.

The average pay increases ranged from 2.5% in manufacturing to 3.9% in retail.

Despite all the positive signs, the Scottish Chambers of Commerce is not concluding that the worst of the recession is over; but that the first stage may be ending.

Scottish Secretary Jim Murphy said: "After the economic shocks and storms of the recession, it would be too much to say one economic swallow makes a summer.

"However, today's report at least holds some cautious signs of the resilience of our economy and our ability to adapt to meet the many challenges we face.

"Any sign, however tentative, that confidence is returning to the business sector should be welcomed as it will play a big part in our ability to rebound from recession."

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