The survey, the latest quarterly summary of the Scottish economy by Strathclyde University’s Fraser of Allander Institute for Scottish Chambers of Commerce, said results for the third quarter were “generally better than expected”.

It adds, “This was a good summer for tourism with strong demand from Scotland and the rest of the UK although, as anticipated, demand from overseas remains weak.

“Retail sales have improved with larger firms reporting better trading conditions than smaller firms. However, the overall trends remained flat.

“Construction firms reported increased levels of work in progress but concerns as to skill shortage were more evident than in previous quarters.

“It is also encouraging that both wholesale and retail respondents are more optimistic as to sales trends for the fourth quarter and construction respondents expect increased activity over the next six months.

“All of this is encouraging and indicates better performance than in the earlier part of the year. However, as we would expect with the current global trends, manufacturing remains a cause for concern and there are few signs of any improvement anticipated over the next 12 months.”

Mr Rolfe said there were many areas of the Dundee and wider Tayside economy that were doing well although, as the report’s authors said, overseas tourism remained a problem.

“There is some evidence that the Rosyth ferry service is beginning to have a beneficial impact but we are looking to VisitScotland to ‘up’ their support for overseas tourists to come to Dundee and Tayside.

“However, we are not seeing the decline in business confidence in retail distribution that is mentioned in the report. There is still a good deal of confidence and optimism about the future.”

The economic survey said business confidence was “flat” in the construction industry but Mr Rolfe said there was a lot of building work either taking place or about to get under way in Tayside.

He specifically highlighted the £80 million Public-Private Partnership that will lead to the replacement of some Dundee schools and proposed developments at the city’s waterfront as giving cause for optimism.

Although the city, like many parts of Scotland, was suffering from a shortage of skilled craftsmen, the biggest problem for local construction companies was winning their fair share of building work.

Mr Rolfe said, “We need to work harder with those drawing up the contracts to see if we can encourage them to use more local firms. Overall, there is optimism in the economy. Business inquiries are at a good level and property prices continue to rise — usually a good indicator.