SCOTLAND’S economy is barely growing as businesses continue to struggle against weak demand and the continuing threat of fall-out from the eurozone debt crisis.
Figures released today show a marginal improvement during the three months to the end of February, though the majority of readings remain in negative territory. The latest Bank of Scotland business monitor also reveals a continuing divide between the services and production sectors, with the latter reporting positive sales growth and higher levels of optimism.
Donald MacRae, chief economist with the bank, said the findings do not indicate a return to deep recession. However, neither is there evidence of strong growth in the private sector.
“A return to more vigorous growth in the Scottish economy awaits a further increase in confidence in both consumers and businesses,” MacRae said.
“This in turn depends upon building on policy measures to contain the eurozone sovereign debt crisis and implementing policies to restore the eurozone and UK economies to growth.”
Following economic stagnation in the autumn, 29 per cent of Scottish firms reported a rise in turnover during the latest quarter. Some 34 per cent posted a decrease, while 37 per cent said sales remained steady. The overall balance of -5 was an improvement on the -10 of the previous quarter, and -6 from the same period a year earlier.
The production sector saw overall sales growth, with a net balance of +2. Services businesses remained in negative territory at -9, though this was a significant improvement upon the -16 of the previous quarter.
More than a quarter of services businesses surveyed expect turnover to decline in the coming six months, versus just 18 per cent in the production sector. Expectations for future export activity fell from the previous quarter, but remain in positive territory.