Growth in Scotland slowed during the first quarter of this year, according to the first Royal Bank of Scotland Business Monitor.
The research for the monitor, conducted by the Fraser of Allander Institute, showed that firms across Scotland are reporting falling exports.
In the three months ending February 2016, sales, business activity, new business volumes and investment all weakened.
But many Scottish firms are expecting a modest upturn in turnover and activity in the medium-term.
The main cause of slowing growth appears to be the weakening oil price, with businesses surveyed in the North East reporting weaker performance across the quarterly report’s indicators.
About 39% of firms reported that total volume of business fell compared to just 21% who saw an increase in activity.
About 22% of companies said that turnover rose while 43% said it fell.
Only 17% of firms said export activity rose, while 39% said it fell.
In terms of new business, service firms reported a small improvement, compared to a downturn of -22% for production industries.
Across all sectors, 26% reported that new business rose while 34% recorded a fall.
Stephen Boyle, chief economist with the Royal Bank of Scotland, said: “These results are disappointing but not surprising.
“Slowing growth in the first quarter has largely been visited on Scotland from outside through a combination of the low oil price and weak export demand.
“Against this backdrop it’s encouraging that firms expect a modest rebound in growth over the next six months.”
Malcolm Buchanan, managing director of corporate & commercial banking and chairman of Royal Bank of Scotland in Scotland, said: “The findings of the Royal Bank of Scotland Business Monitor echo what we are hearing day to day from our customers – the Scottish economy is experiencing some headwinds but our customers see opportunities in the long run.
“We’re working hard to support our customers and to help those businesses taking a long term view of investment for growth.
“Our work with the Scottish farming community in developing the Bridging Payment Scheme and our ongoing work with our customers affected by the oil and gas downturn reflects our desire to find solutions to issues affecting sectors and individual operators.
“We are also working hard to support fledgling businesses across Scotland and our recent Enterprise Hub launch in Edinburgh is another example of our long term commitment to Scottish businesses.
“The Royal Bank of Scotland Business Monitor findings suggest that there are reasons to be optimistic in the long-term and we are working to help our customers be ready to take advantage of the upturn when it comes.”