Economic confidence in Scotland 'returning'


Economic confidence in Scotland 'returning'
Confidence in the Scottish economy among firms north of the border returned during the last three months, according to a new report.

The Lloyds TSB Scotland Business Monitor for the three months ending May 2006 showed that significantly more companies have reported increase turnover and also expect revenue to rise further in the coming months.

After last quarter's disappointing results, today's survey shows that 45 per cent of firms revealed an increase in income between the beginning of March and the end of May, with only 19 per cent reporting a decrease, giving a positive balance of 26 per cent – more than double last month's quarterly results of plus 11 per cent.

In addition, 45 per cent of firms believe that their turnover will increase again over the coming three months.

Donald MacRae, chief economist at Lloyds TSB Scotland, explained that the apparent resurgence in Scotland's manufacturing sector was especially heartening, with production firms' expectations matching those of the usually dominant services industry more closely than ever before.

"Growth prospects in the economies of Scotland's main markets in the Eurozone have strengthened creating increased demand for Scottish exports and a continuing platform for recovery in Scotland's manufacturing sector," he said.

But at the same time as confidence in the economic outlook returns, the availability of staff continues to be businesses' greatest single priority, with recruitment demands at their highest levels since the monitor began almost nine years ago.

"Relatively low interest and inflation rates coupled with low levels of unemployment continue to maintain Scottish consumer confidence. The Scottish economy should grow between 1.75 per cent and two per cent in 2006," added Mr MacRae.

Related categories: Management / Business, Banking / Finance.

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