Scottish firms 'gloomier' on export prospects

Scottish firms are much gloomier about their export prospects than they were in the summer, according to a survey.

The slump in expectations came as Bank of Scotland's latest business monitor indicated improved export activity seen in the first three quarters of 2014 had ground to a halt.

The bank said exporting was "proving a challenge" in the face of stagnant eurozone economies.

Overall, it expects economic recovery to continue through 2015.

But it also expects the rate of growth to ease.

The bank's summer business monitor saw firms' expectations about exports reach their second highest level in more than 16 years.

But its latest survey, covering the three months to the end of November, showed a big fall in the percentage of firms which were positive about overseas sales over the next six months.

There was a net balance of +5% - down on the +32% of the previous quarter.

The overall net balance for export activity was -4%, which was well down on the +13% of the previous quarter, but an improvement on the same quarter in 2013.

The net balance is calculated by subtracting those that report a decrease from those that report an increase.

In the latest survey, 41% of firms said they had increased turnover, while 34% experienced static turnover and 25% reported a decrease.

'Embed recovery'

This gave a net balance of +16% - down from the +30% of the previous quarter but marginally up on the +15% noted a year ago.

The Bank of Scotland said it was the fifth best result in seven years and provided further evidence of the embedding of the recovery.

Expectations for turnover in the next six months showed an overall net balance of +19%. This was marginally down on the previous quarter but up on the +16% recorded in the same quarter a year ago.

Volumes of repeat business remained at high levels in the latest quarter, with a net balance of +15%.

Bank of Scotland chief economist Donald MacRae 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."