Scots economy bouncing back from slowdown - report

Scotland’s economy is gathering momentum following a slowdown at the start of the year, thanks to strengthening new business levels, a report today indicates.

Donald MacRae says moderate growth is expected. Picture: Contributed

Expectations for the coming months continue to point towards moderate growth for the remainder of the year, according to Bank of Scotland’s (BoS) latest business monitor.

It shows that in the three months to August, 36 per cent of firms surveyed increased turnover, 36 per cent experienced static turnover, and 28 per cent experienced a decrease.

This gave a net balance of +8 per cent, marginally up from the +7 per cent of the previous quarter but down from the +30 per cent of the same quarter one year ago.

Turnover for firms in the production sector improved on the previous quarter but was significantly down on the same period in 2014 while the services sector showed a decline on the previous three months.

Firms reported a marginal improvement in volumes of repeat business in the latest three months. However, trends in the volume of new business are much better with an overall net balance of +17 per cent compared to +3 per cent of the previous quarter and close to the +23 per cent of the same quarter one year ago. Export activity did show a fall but at a slower rate than in the previous quarter.

BoS chief economist Donald MacRae said: “The Scottish economy slowed at the start of 2015 but is expected to return to moderate growth in summer and autumn. Expectations remain positive and suggest that current growth rates will be maintained in the third quarter of the year.”

Deputy First Minister John Swinney said the report highlighted “positive conditions” in the Scottish economy.