Scottish economy 'continuing to stagnate'

Business expectations have risen slightly despite continuing stagnation in the Scottish economy, a quarterly survey of firms has suggested.

The latest Lloyds TSB Scotland Business Monitor indicated an improvement in firms' assessment of their short-term prospects.

Almost half said they expected turnover to be static in the next six months, while 23% expected it to increase.

The net balance of -5% was a slight improvement on the previous quarter.

Production companies were more optimistic about their immediate prospects than service firms, while expectations for future export activity showed a marked improvement at +16% - up from the -3% on the previous three months.

Lloyds TSB Scotland said its survey results for the quarter ending November 2012, suggested the economy was continuing to stagnate.

A total of 29% of firms surveyed said they increased turnover, with 32% experiencing static turnover and 39% reporting a decrease.

This gave a net balance of -10% - a deterioration from the -3% of the previous quarter.

The production sector showed a slight improvement in turnover while service sector figures were significantly worse than the previous quarter.

'Expectations up'

Lloyds TSB Scotland chief economist Donald MacRae 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."

He added: "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."