Manufacturing leads business confidence

Published on Wednesday 27 September 2006 00:59

LLOYDS TSB Scotland's latest economic monitor shows companies have enjoyed a strong past three months.

This latest edition, for the period ending last month, shows 43 per cent of firms surveyed reporting an increase in turnover, 36 per cent reporting static turnover and 21 per cent reporting a decrease, giving a net balance of +22 per cent, significantly up from the +17 per cent for the same quarter in 2005.

Turnover remains positive in both production and services, though the manufacturing sector is now reporting stronger results than services. The net balance figure for turnover for production was +28 per cent compared with +20 per cent for service. In the previous quarter, the figure for production was +25 per cent and for services +26 per cent.

Expectations for turnover in the next six months continue to remain at a high level. Production businesses are showing stronger expectations, with a net balance figure of +48 per cent compared with +23 per cent for service businesses - the highest figure for manufacturing in nine years of the Business Monitor survey.

Professor Donald MacRae, chief economist, Lloyds TSB Scotland said: "

The Scottish economy has recovered well from the slowdown experienced at the end of last year and is growing around its trend rate in 2006. The Scottish economy should grow at around 2 per cent in 2006."