The Courier & Advertiser (Fife Edition)
Scots economy expected to flatline in year ahead
SCOTLAND’S ECONOMY will continue to stagnate this year despite some positive early signs for exporting prospects.
Lloyds TSB’s latest quarterly Business Monitor, released yesterday, shows the health of the country’s important services sector deteriorated in the three months to the end of November.
The 16% fall in turnover in the period represented a turnaround from the 1% positive return in the previous quarter, and a year-on-year deterioration from the -8% figure at the same point in 2011.
In the economy as a whole, 29% of firms surveyed said they had experienced an increase in revenues in the quarter, 32% saw no change and 39% reported a decrease — a balance of -10%, representing a further downturn on the -3% decrease of the previous quarter.
The survey also found that volumes of repeat business were down — although there was a slight upturn in new work — while the expectation was that revenues would drop further in the six months ahead.
One glimmer of hope came from exporters, who expect a 16% rise in activity in the three months ahead — up from the 3% decline reported in the previous quarter and a significant turnaround on the situation 12 months ago when prospects for those trading outwith looked bleak (-15%).
Donald MacRae, chief economist at Lloyds TSB Scotland, said the findings pointed to a flatlining economy this year.
He said: “The Scottish economy stagnated during the summer. This latest Business Monitor suggests the stagnation of the summer has continued.
“However, there are no definite signs of a relapse into deep recession. Despite the apparent poor performance in autumn, business expectations for 2013 have improved from a low position.
“A return to more vigorous growth in the Scottish economy awaits a further increase in confidence in both consumers and businesses.
“This in turn depends upon building on policy measures to contain the eurozone sovereign debt crisis and implementing policies to restore the eurozone and UK economies to growth.” A Scottish Government spokesperson said economic growth remained its top priority.
The spokesperson said: “While it is encouraging to see such a significant improvement in firms’ expectations for
“This latest Business Monitor suggests the stagnation of the summer has
continued.”
Donald MacRae
future export activity, we recognise that Scottish businesses continue to face a challenging economic environment.
“The Scottish Government recognises that more needs to be done to stimulate the economy, and that is why our draft budget outlines further investment in construction, skills and the green economy.
“Last month the Finance Secretary also announced additional funding for construction projects worth a total of £205 million. We continue to provide the most competitive business environment in the UK, with a comprehensive business rates relief package worth over £500m a year.”