Production companies were more optimistic about their immediate prospects than those in the service sector. Their expectations for future exports showed a marked improvement – up 16% from the -3% on the previous three months. The bank however added that its survey results for the quarter ending November 2012, suggested the economy was continuing to stagnate.
According to its chief economist, Donald MacRae, “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.”
Privately, Professor MacRae is cautiously optimistic about the overall conditions of the economy. Speaking at a private event last month, he pointed out that businesses were continuing to trade and that optimism on the ground was higher than the official figures often suggested.
He also claimed that the banks, his own in particular, had money to lend. He explained that their current savings deposits were actually too high which meant that they would welcome approaches from businesses with viable investment projects. This view is supported by anecdotal evidence from other banks, such as the Clydesdale and HSBC.
This latest survey suggests that 29% of firms expect to increase their turnover; however, 32% believe it will remain static while 39% report a decrease. Professor MacRae believes that “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.”