SCOTLAND’S economy has continued to recover from a slow start to the year, with new business levels picking up during the summer and growth forecast for the rest of the year, according to a Bank of Scotland report.
Its Business Monitor showed that in the three months to August, 36 per cent of firms surveyed increased turnover, the same percentage showed a static turnover and 28 per cent saw it decrease.
This gave a net balance of eight per cent – this is a one per cent rise on the previous quarter, but well down from the 30 per cent recorded for the same quarter one year ago.
The bank’s chief economist, Donald MacRae, said: “Expectations remain positive and suggest that current growth rates will be maintained in the third quarter of the year.”
MacRae said the importance attached to staff availability over the next three months rose for production firms but fell for services firms. However, despite moderate performance prospects, employers still intended to continue recruiting staff.
“Falling unemployment is contributing to high levels of consumer confidence,” he added. “This is being expressed through moderate increases in consumer spending, accompanied by a fairly constant rate of saving.
“Earnings growth is now exceeding the rate of consumer price inflation.”
The overall net balance of turnover for firms in the production sector was three per cent – an improvement on the minus two per cent of the previous quarter (35 per cent a year ago).
For service firms the figure was down to 11 per cent from 14 percent in the previous quarter and well down on the 27 per cent from 12 months ago.
Volumes of repeat business showed a slight improvement in the past three months with an overall net balance of two per cent. Trends in the volume of new business were much improved with an overall net balance up to 17 percent from three per cent in the previous quarter.
MacRae said exporting to Eurozone economies should become easier as growth picks up in many of the currency bloc’s member countries, but this was being hampered by the rise of sterling against the Euro.
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