SCOTTISH producers suffered a renewed decline in their overall turnover in the three months to May, a survey from Bank of Scotland signals.

And the survey of 400 businesses, published today, points to a marginal acceleration in the rate of decline of the overall turnover of firms in Scotland's dominant services sector in the three months to May.

However, Bank of Scotland chief economist Donald MacRae was encouraged by positive signs on export activity and expectations among businesses of a significantly better overall turnover performance in the six months to November.

Bank of Scotland's latest business monitor, run by Strathclyde University's Fraser of Allander Institute, showed only 26% of firms in the production sector in Scotland achieved a rise in turnover in the three months to May, while 31% suffered a fall and the remainder reported a flat position.

The net 5% of production businesses reporting a fall in turnover in the three months to May represented a deterioration from a balance of 2% declaring an increase in the previous quarterly business monitor. It was also worse than a balance of 4% of production firms reporting a rise in turnover for the three months to May last year.

Among Scottish services businesses, 29% achieved a rise in turnover during the past three months to May, and 39% suffered a decline.

The resultant net 10% reporting a fall represented a marginal deterioration from a balance of 9% declaring a drop in turnover in the previous quarterly monitor. A net 5% of services firms reported a fall in turnover in the three months to May last year.

Across all businesses surveyed, 36% reported a fall in turnover during the latest three months to May and 28% achieved a rise. The net 8% of Scottish businesses reporting a fall in turnover pointed to a slightly weaker picture than in the previous quarterly business monitor, in which a balance of 5% of firms declared a decline.

Asked if he was disappointed by the responses from businesses about turnover levels during the three months to May, Mr MacRae replied: "I had expected them to be a bit better than they are but I am reassured by the fact they haven't gone hugely negative."

He added: "The questions on what has happened in the past tense, the answers to these are only showing a moderate performance, but the expectations have risen quite significantly for turnover and export activity."

Asked about expectations of turnover over the six months to November, 32% of firms projected a rise and only 19% forecast a fall.

Mr MacRae declared that business expectations were at the highest level for more than five years.

Firms in the production sector were slightly more optimistic than services businesses about future turnover. Among production businesses, 36% predicted a rise in turnover over the six months to November and 18% forecast a decline. In services, 29% forecast an increase in turnover and 19% projected a fall.

Meanwhile, 34% of Scottish firms surveyed projected a rise in export activity over the six months to November, and 15% predicted a decline.

The survey also pointed to a significant improvement in export activity among Scottish firms during the three months to May, with 30% enjoying a rise and 18% experiencing a decline. The resultant net 12% reporting a rise was a major improvement on a balance of 5% declaring a fall in export activity in the previous quarterly monitor.

Among production businesses, 34% enjoyed a rise in export activity in the three months to May and 25% experienced a decline.

Mr MacRae said: "Despite the apparent moderate performance in spring, business expectations for the second half of 2013 have improved significantly to the highest level for five-and-a-quarter years.

"A return to more vigorous growth in the Scottish economy is dependent on an increase in confidence in both consumers and businesses. Some of this confidence-building appears to have begun in the first six months of 2013. If it continues throughout the year, the Scottish economy should record a year of growth in 2013."

He voiced agreement with Fraser of Allander's forecast last week that the Scottish economy would grow by 0.9% this year, but believed this could be exceeded if businesses' more upbeat expectations were realised.