Scottish firms are putting off investment because of uncertainty over the UK's future relationship with Europe, according to a survey.
Scottish Chambers of Commerce (SCC) found firms were struggling to grow, amid political deadlock over Brexit.
Firms reported a rise in costs as they prepared for Brexit, with manufacturers stockpiling raw materials.
Most sectors also saw wage bills rise in the second quarter, as firms paid more to retain staff.
SCC said businesses were "weighing the costs of the chaos caused by more dithering over Brexit".
Tory leadership rivals Boris Johnson and Jeremy Hunt have been at loggerheads over how the UK should leave the EU.
Both contenders for prime minister have claimed they can renegotiate a Brexit deal that the EU says is closed.
