Scots economy 'on road to recovery' despite harsh winter

SCOTLAND is on the road to economic recovery despite a blip caused by the poor winter weather, according to a report published today.

The Lloyds TSB Scotland Business Monitor survey shows a "tentative exit" from recession, with five of the last six quarters showing an improvement in company turnovers.

A poorer economic performance between December and February was blamed on the harsh weather.

The three months to May saw the biggest increase in exports for three years. During this period, 33 per cent of firms surveyed reported an increase in turnover, the strongest result in two years.

The production sector also saw significant improvements, compared with the same period last year. However, production and service businesses have low expectations of increasing their turnover in the next six months.

Businesses also expect increased cost pressures in the year ahead.

Lloyds Banking Group Scotland chief economist Donald MacRae predicts that the economy will grow by as much as one per cent this year.

He said: "The Scottish economy returned to growth at the end of last year with output growth of 0.2 per cent.

"The recovery stalled in mid-winter but has now resumed. However, the service sector is feeling the effects of low consumer confidence. Nevertheless, the Scottish economy should grow between 0.5 per cent and one per cent during 2010."