Scottish economy slows sharply, says Bank of Scotland report

The Scottish economy slowed down sharply at the start of the year but is expected to return to growth over the next few months, according to a report.

The Bank of Scotland's latest business monitor found the economy slowed in the three months to the end of February.

However, it also found firms' future expectations remained close to pre-recession levels.

The monitor said this suggested growth would pick up in the second quarter of the year.

Of 408 firms surveyed, 33% said they saw an increase in turnover in the latest quarterly period, with 34% experiencing static turnover and 33% experiencing a decrease.

This gave a net balance of 0% - down from the +16% of the previous quarter and the +18% of the same quarter a year ago.

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

'Sharp jolt'

It was the worst result for turnover in 21 months, suggesting the Scottish economy experienced a sharp jolt to growth at the start of this year, the business monitor said.

Turnover for firms in the production sector was down significantly while the services sector also showed a sharp slowdown.

Firms also reported a fall in volumes of repeat business and new business while export activity increased slightly.

Businesses remained optimistic for the next six months, with 34% expecting to see turnover increase, compared with 20% who expected a decrease. A further 46% expected it to remain static.

Bank of Scotland chief economist Donald MacRae said: "The Scottish economy slowed at the start of 2015 but is expected to return to moderate growth in spring."