Scotland business

Economy shows continued recovery, says Bank of Scotland

Scottish bank notes Image copyright Getty Images
Image caption Bank of Scotland predicts economic recovery will continue into 2015

The Scottish economy is continuing to recover with performance at pre-recession levels, according to a survey.

The Bank of Scotland business monitor found turnover trends and expectations comparable with those of 2007.

It said a "surge" in economic activity last year was maintained, suggesting the recovery will continue into 2015.

Of the firms surveyed, 49% reported that turnover had increased over the three months to August.

That compared with 19% of firms which reported a decrease.

Subtracting those who had a fall in turnover from those who experienced a rise gives a net balance of +30%.

That figure was an improvement both on the +28% reported in the previous quarter and +23% in the same quarter last year.

"This is the best result in over seven years and returns the net balance figure to pre-recession levels," the report stated.

In the production sector, the net balance in the three months to the end of August was +35%, up from the +24% of the same quarter a year ago.

Service businesses showed a similar pattern of improvement with a net balance for turnover at +27%, up from +22% in the same quarter last year.

Volumes of repeat business remained at high levels while trends in the volume of new business have been maintained, the report found.

'Surge' maintained

A recovery in export activity noted in the previous two business monitors was maintained with the overall net balance for export activity at +13%, similar to the +14% of the previous quarter and well up on the -1% of the same quarter a year ago.

The report further found that firms' assessment of their immediate prospects in the next six months was on a rising trend throughout 2013 and reached highs in the first half of this year.

The gain has been partially reversed in the latest quarter but is still slightly above the high levels of the second half of 2013.

Firms' expectations for the volume of new business in the next six months were "optimistic" despite being slightly down compared to the previous quarter.

Donald MacRae, chief economist at the Bank of Scotland, said: "The surge in economic activity identified in summer 2013 has been maintained into summer and autumn this year.

"Expectations have fallen slightly but are at pre-recession levels, suggesting the recovery will continue throughout 2014 and into 2015. Further increases in investment by firms would enhance the recovery."

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