Scotland’s economic recovery is set to continue in 2014, but concerns persist over the strength of the nation’s exports, according to a key survey published today.
The latest Bank of Scotland business monitor – a poll of more than 400 businesses – confirmed that the recovery had continued into the autumn of 2013, with this “accompanied by high expectations for the next six months”.
The bank’s chief economist, Donald MacRae, said that, overall, the Scottish economy should record a year of growth for 2013, adding that suggestions were this recovery would continue in 2014.
A total of 37 per cent of businesses surveyed said their turnover had increased in the three months up to the end of November, with 41 per cent reporting this as being unchanged.
Just over a fifth – 22 per cent – reported a decline in turnover during the three months. When this total is subtracted from the proportion of firms who had seen their turnover grow, it gives a net balance of +15 per cent – a fall from the previous quarter but the second-highest result in the last six years.
The quarterly survey comes after last month’s purchasing managers’ index – also from Bank of Scotland – showed growth in the nation’s private sector slowing to its weakest pace in six months.
The report’s key output barometer dipped to 55.2 in November, down from 57.8 in October and August and September’s survey-high readings of 58.3. Any reading above 50 constitutes growth, 50 indicates no change and below 50 suggests contraction.
Today’s business monitor revealed that export activity was down on the previous quarter and lower than for the same period in 2012, with just 20 per cent of firms seeing a rise in exports, compared to 34 per cent which saw a decline.
This gives a net balance for export activity of -14 per cent, compared to -1 per cent three months ago and -3 per cent 12 months ago.
Despite the poor result, expectations for exports in the coming months are at almost the highest level for nine years.
More than a third of firms are expecting turnover to grow in the next six months, with just a fifth expecting this to shrink.
At the same time, 35 per cent of firms believe their total volume of business will grow in the next six months while 16 per cent expect this to fall.
MacRae said: “The surge in economic activity identified in summer 2013 has been maintained through to autumn, with the latest quarter showing the second best result in six years.
“As a result, the Scottish economy should record a year of growth in 2013. Expectations for 2014 remain high suggesting the recovery will continue into 2014. Consolidation of the recovery would be enhanced by firms increasing investment.”
The monitor is run by the Fraser of Allander Institute at the University of Strathclyde and today’s report is the 64th of its kind.
Finance Secretary John Swinney said: “There are grounds for optimism and there are signals that the Scottish economy is likely to strengthen further in the next 12 months, with recent economic data indicating that the economy as a whole will return to pre-recession levels in 2014.
“There will be no let-up in the Scottish Government’s commitment to securing economic growth.”