As the recession finally heads for the dust, confidence is growing again after one of the biggest recessions in history and one with the slowest pace of recovery.
Internationally the US has led on growth, but the US has stalled in the latest statistics with growth contracting at an annualised -2.9% in the first quarter of 2014.
Most western countries have faced a protracted rate of growth, keeping economic activity below pre-recession levels. If like me, you remember recessions in previous decades, Scotland was last into the recovery period and first to feel the draught of the next recession. Times have changed and by concentrating on the new growth industries, the Scottish economy has been repositioned from its aging structure in the second half of the twentieth century.
The latest Business Monitor from Bank of Scotland shows the Scottish economy performing at pre-recession levels. The report notes:
‘Turnover trends are showing the best results in almost seven years and expectations for the rest of the year remain elevated at levels last seen in 2007.
‘Expectations for turnover in the next six months are showing an overall net balance of +36%. This is similar to the +37% of the previous quarter and up on the +13% of the same quarter one year ago. Whilst 44% expect turnover to be static in the next six months, 46% expect turnover to increase against 10% who expect a decrease. Service firms are slightly more optimistic than production firms, with service firms showing an overall net balance for turnover for the next six months at +38% compared to +32% for production firms.’
Donald MacRae, chief economist, Bank of Scotland said, ‘The surge in economic activity identified in summer 2013 has been maintained into summer this year. Expectations are at their highest level since mid 2007, suggesting the recovery will continue throughout 2014. Further increases in investment by firms would enhance the recovery.’