Business Growth Follows Winter Slump

Scotland's economy is recovering from a recent slowdown, according to a survey of major firms.

In the latest Bank of Scotland business monitor, 71% of companies saw increased or static turnover in the last quarter, and expect the next six months to continue positively. It comes after our economy suffered a hit in the Winter from poorer than usual weather and the oil and gas crisis.

In the three months ending May 2015, 36% of firms surveyed increased turnover, 35% experienced static turnover, and 29% experienced a decrease. This gave a net balance of +7%, up from the 0% of the previous quarter but well down from the +28% of the same quarter one year ago. This latest result is a welcome reversal of the negative trend identified in the previous six months.
 
Expectations for the volume of repeat business were marginally down on the high levels of the last quarter with an overall net balance of +8% for this quarter compared to +10% for the previous quarter and significantly down +17% for the same quarter one year ago.  Expectations for the volume of new business in the next six months were optimistic with the latest net balance at +16% - up on the +14% of the previous quarter and down on the +32% of the same quarter one year ago.
 
These expectation levels suggest the private sector of the Scottish economy will show growth close to trend level in the second quarter of 2015, recovering from the slowdown at the start of the year.
 
Donald MacRae, chief economist, 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."