Scottish economy recovering from slowdown –BoS

Expectations for the next six months have improved to the fourth best level in seven and a half years.

In the three months ending May 2015, 36 per cent of firms surveyed increased turnover, 35 per cent experienced static turnover, and 29 per cent experienced a decrease.

This gave a net balance of +7 per cent, up from the 0 per cent of the previous quarter but well down from the +28 per cent of the same quarter one year ago. This latest result is a welcome reversal of the negative trend identified in the previous six months.

The overall net balance of turnover for firms in the production sector in the three months to end May 2015 was -2 per cent. This is an improvement on the -4 per cent of the previous quarter but well down on the +25 per cent of the same quarter one year ago.

Service firms showed a net balance of +14 per cent, well up on the figure of +4 per cent in the previous quarter but down on the +29 per cent seen a year ago.

The monitor also indicated a significant fall in export activity, with a slowing world economy and a rising pound sterling taking their toll of firms’ assessment of their export prospects.

The report suggested exporting to eurozone economies should become easier as growth picks up in many of the currency bloc’s member countries.

Donald MacRae, chief economist, Bank of Scotland said: “The Scottish economy slowed at the start of 2015 but is expected to return to moderate growth in spring and summer. Expectations remain close to pre-recession levels suggesting that growth will pick up in the second quarter of the year.”