Retailers reported a weakening trend in sales
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An unsettled period lies ahead for the Scottish economy, according to the country's business leaders.
A survey by the Scottish Chambers of Commerce found firms were optimistic about sales and profits but that confidence in the future had dipped.
Director Liz Cameron said: "The climate for business in Scotland is becoming more unsettled, with firms beginning to tone down their expectations."
She called for a reduction in interest rates and changes to business rates.
"Those in government and the Bank of England charged with maintaining the well-being of the economy should be prepared to act, swiftly if necessary, to give the economy a shot in the arm if the prospects for growth continue to slip," she said.
"Firstly, with the Scottish economy slowing and still behind, in most cases, the rest of the UK we would urge the monetary policy committee to take the decision to reduce interest rates at its next meeting.
"Secondly, business rates in Scotland are still higher than the rest of the UK and this was cited across a number of sectors as a key inhibitor to growth.
"We would again urge the Scottish Executive to consider a suitable timescale to introduce business rates parity with England."
The survey was carried out in the second quarter of this year in conjunction with the Fraser of Allander Institute at Strathclyde University.
It said there was a positive outlook for businesses in the manufacturing, construction, wholesale and tourism sectors.
Efficiency improvements
Firms were anticipating continued growth, although at a reduced rate.
Retailers reported a weakening trend in sales for the third quarter in a row.
"Our manufacturing sector is reporting slight improvement, particularly from the home market, and is investing in efficiency improvements and equipment," said Ms Cameron.
"However, there still appears to be little interest in research and development and identifying new products and markets.
"This raises a number of questions in terms of what specific support Scottish Development International (SDI) is providing across the business arena and this is something that the Scottish Chambers of Commerce fully intends to take forward with Scottish Enterprise and the executive."
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We would again urge the Scottish Executive to consider a suitable timescale to introduce business rates parity with England
