Scottish Economy 'Recovering from Slowdown'
The Scottish economy is continuing to recover from the slowdown at the start of the year amid new business levels picking up strongly over the summer, according to a new report.
Expectations for the coming months continue to point towards moderate growth for the remainder of the year, the Bank of Scotland's latest business monitor suggests.
It showed that in the three months to August, 36% of firms surveyed increased turnover, 36% experienced static turnover, and 28% experienced a decrease.
This gave a net balance of +8%, marginally up from the +7% of the previous quarter but down from the +30% of the same quarter one year ago.
Turnover for firms in the production sector improved on the previous quarter but was significantly down on the same period in 2014 while the services sector showed a decline on the previous three months.
Firms reported a marginal improvement in volumes of repeat business in the latest three months.
However, trends in the volume of new business are much better with an overall net balance of +17% compared to +3% of the previous quarter and close to the +23% of the same quarter one year ago.
The bank said new business volumes in the summer recovered to the levels seen in 2014 after a poor six-month period at the end of last year and the spring of this year.
Export activity did show a fall but at a slower rate than in the previous quarter.
Businesses remain optimistic for the next six months, with 34% expecting turnover to increase against 19% who predict a decrease. A further 47% expect it to be 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 summer and autumn.
Expectations remain positive and suggest that current growth rates will be maintained in the third quarter of the year.''
Commenting on the report, Deputy First Minister John Swinney said it highlighted positive condition'' in the Scottish economy.
Firms gave their strongest score for new business this year, and business volumes and turnover are up on the previous quarter,'' he said.
With forward expectations firmly in positive territory firms are anticipating a continuation of these trends over the remainder of the year.
The survey continued to report challenging conditions for exporters, with production firms highlighting an unfavourable exchange rate and slowing world growth as key constraints to exporting activity.
Nonetheless, the survey reported positive hiring intentions among firms, which is encouraging and comes on the back of last week's Labour Market statistics which showed Scotland's labour market performing well across a range of measures, with the highest employment rate and lowest inactivity rate of all four UK nations."