Economy Makes Slow Start To 2015

The Scottish economy slowed down sharply at the start of the year but is expected to return to growth in the coming months, according to a new report.

The Bank of Scotland's latest business monitor found that the economy slowed in the three months to the end of February but is anticipated to grow close to pre-recession levels over the next six months.

It reported that in the three months ending in February, 33% of the 408 firms surveyed saw an increase in turnover, 34% experienced static turnover and 33% experienced a decrease.

This gave a net balance of 0%, down from the +16% of the previous quarter and the +18% of the same quarter a year ago.

The net balance is calculated by subtracting those that report a decrease from those that report an increase.

It was the worst result for turnover in 21 months, suggesting the Scottish economy experienced a sharp jolt to growth at the start of this year, the business monitor said.

Turnover for firms in the production sector was down significantly while the services sector also showed a sharp slowdown.

Firms also reported a fall in volumes of repeat business and new business while export activity increased slightly.

Businesses remain optimistic for the next six months, with 34% expecting to see turnover increase, compared with 20% who expect a decrease. A further 46% expect it to remain static.

Bank of Scotland chief economist Donald MacRae said: The Scottish economy slowed at the start of 2015 but is expected to return to moderate growth in spring.

Expectations have fallen slightly but remain close to pre-recession levels, suggesting that growth will pick up in the second quarter of the year.''