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6 January 2015, 07:14
The Scottish economy is growing at pre-recession levels, although the pace of recovery has eased since spring and summer, according to a new study.
The latest Business Monitor from Bank of Scotland found that expectations for the next six months remain elevated at levels comparable to 2007 and are at their fourth equal highest in seven years.
In the three months ending November 2014, a net balance of +16% of firms surveyed reported increased turnover, which is down from the +30% of the previous quarter but marginally up on the +15% of the same quarter one year ago.
The net balance is calculated by subtracting those that report a decrease from those that report an increase.
The report said this is the fifth best result in seven years and provides further evidence of the embedding of the recovery.
Donald MacRae, chief economist at Bank of Scotland, said: "The surge in economic activity identified in summer 2013 has been maintained throughout 2014.
"Expectations have fallen slightly but are close to pre-recession levels, suggesting the recovery will continue into 2015 but the rate of growth will ease. Further increases in investment by firms would enhance and embed the recovery.''
The overall net balance of turnover for firms in the production sector in the three months to the end of November 2014 was +12% while for service businesses it was +19%.
Volumes of repeat business remained at high levels in the latest quarter, with a net balance of +15%.
However a recovery in export activity has come to a halt, with the overall net balance for export activity at -4%, well down on the +13% of the previous quarter but above the -14% of the same quarter one year ago.
The report said that exporting is proving a challenge in the face of stagnant eurozone economies.
Expectations for turnover in the next six months ending May 2015 show an overall net balance of +19%, marginally down on the +21% of the previous quarter but up on the +16% of the same quarter one year ago.
The report said: "Firms' assessment of their immediate prospects in the next six months was on a rising trend throughout 2013 and reached highs in the first two quarters of this year.
"These gains have been partially reversed in the latest quarter but still show expectations close to the high levels evident pre-recession.
"This is the eighth successive Business Monitor showing a positive net balance for turnover expectations - the most optimistic sequence of results since seven years.''
Expectations for the volume of repeat business were marginally down on the high levels of the last quarter, while expectations for the volume of new business in the next six months were again optimistic but slightly down compared to last quarter.