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Scottish economy faces slowdown from 'strong position' |
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Friday, 04 January 2008 |
The latest Lloyds TSB Scotland Business Monitor, now in its tenth year, has shown the Scottish economy continuing to grow, but at a reduced rate compared to six months ago.
Professor Donald MacRae, chief economist at Lloyds TSB Scotland, said:
“The Scottish economy is facing a slowdown but from a strong position.
"Although business confidence has fallen particularly in the service
sector, consumer confidence has not. In 2007 the Scottish economy
should grow at around 2.3 per cent. Despite the 'credit crunch' the
Scottish economy is in good shape to face the challenge of 2008."
The survey, for the three months ending November 2007, shows 42 per
cent of firms surveyed reporting an increase in turnover, 32 per cent
reporting static turnover and 26 per cent reporting a decrease.
This gives a net balance of +16 per cent, down from the previous
quarter and less than half that recorded for the same quarter one year
ago. However, this is very close to the long term average of the
Business Monitor.
The slowdown in growth is affecting both manufacturing and service
businesses, both of which have experienced a decline in volumes of new
business compared to the last quarter.
The good news is that, while both sectors are experiencing a slowdown,
they are continuing to grow. For example, almost half of service
businesses experienced an increase in turnover in the period.
Expectations of increasing turnover in the next six months has fallen, although by less than in the previous quarter.
Scottish house prices are continuing to increase - but at a rate nearer to the increase in average earnings.
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