GROWTH in the Scottish economy slowed sharply during the three months to November as exports fell, a key survey has revealed.
And expansion in the Scottish economy is, like that in the UK as a whole, expected to be significantly weaker in 2015 than last year.
The latest Bank of Scotland quarterly business monitor, conducted by Strathclyde University's Fraser of Allander Institute and published today, shows a significant easing of growth in both the production and services sectors north of the Border during the three months to November.
According to the survey, 41 per cent of Scottish companies achieved a rise in turnover over this three-month period, while 25 per cent suffered a drop. The remainder experienced a flat position.
The net 16 per cent of firms reporting a rise in turnover signalled a sharp slowing of growth from the preceding three months, during which a balance of 30 per cent of companies had posted an increase. However, the latest reading is marginally above the balance of 15 per cent of Scottish companies reporting a rise in turnover during the three months to November 2013.
Only a net 12 per cent of Scottish production firms reported an increase in turnover in the three months to November 2014. This was down sharply from a corresponding balance of 35 per cent in the preceding three months. A net 19 per cent of services companies in Scotland reported a rise in turnover. This was down from a balance of 27 per cent in the previous quarterly survey.
A net four per cent of Scottish companies reported export activity had fallen in the three months to November. This marked a significant deterioration from the preceding three months, during which a balance of 13 per cent of firms achieved a rise in exports. The survey signals the fall in export activity was driven by the services sector, with production firms, overall, achieving a marginal increase in overseas sales.
It also shows that Scottish companies expect capital investment, in terms of purchases rather than lease arrangements , to fall in the coming six months, after rising during the three months to November.
A net 11 per cent of Scottish production companies forecast a rise in turnover during the six months to May. A balance of 24 per cent of services firms predicted an increase in turnover over the same period.
Donald MacRae, chief economist at Bank of Scotland, expects the Scottish economy to have grown by nearly three per cent in 2014. He is forecasting a slowing of expansion in Scotland to between 2.25 per cent and 2.5 per cent this year.
Contemplating the survey results for the three months to November, Mr MacRae said: "How much of a slowing is it? It is obviously significant and it is showing up in other [data] series as well."
He added: "I think confidence has slipped a bit because of the huge increase in geopolitical uncertainties all over the world, from Syria to Russia to a slowing of growth in China. It is really only the US where the recovery continues on very strongly. The other thing is the eurozone, with its stagnation."
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