Economy Recovery 'Picking Up'

25 June 2015, 06:00

Scotland's economic recovery has picked up pace again after a slow start to the year but exports have fallen dramatically as the eurozone crisis continues, according to the Bank of Scotland.

Over a third of firms reported increased turnover while almost the same proportion broke even in the three months to May, the bank's business monitor found.

Well under a third (29%) reported decreased turnover, leaving an overall positive picture for Scotland's economy.

Bank of Scotland said: "This latest result is a welcome reversal of the negative trend identified in the previous six months.''

Performance was strongest in the production sector with a 14% increase in turnover, up from 4% last quarter, while the decline in turnover in the production sector has slowed from -4% to -2%.

Export activity is showing a significant fall of -24%, compared with +6% in the previous quarter and the +14% of the same quarter one year ago.

The bank said: "Exporting to eurozone economies should become easier as growth picks up in many of the currency bloc's member countries but is being hampered as the rise of sterling against the euro as quantitative easing takes effect.''

Business confidence remains high and has risen close to pre-recession levels, with 10 successive quarters of positive expectations for turnover, with the exception of exporters whose confidence in the future has dipped.

The bank added: "An increase in uncertainty, a slowing world economy and a rising pound sterling have taken their toll on firms' assessment of export prospects.''

Donald MacRae, chief economist at Bank of Scotland said: "The Scottish economy slowed at the start of 2015 but is expected to return to moderate growth in spring and summer. Expectations remain close to pre-recession levels suggesting that growth will pick up in the second quarter of the year.''