In the three months ending November 2012, 29% of firms surveyed increased turnover, almost a third (32%) experienced static turnover, and 39% experienced a decrease. This gave a net balance of -10%; a deterioration from the -3% of the previous quarter and the -3% of the same quarter one year ago.
The overall net balance of turnover for firms in the production sector in the three months to end November this year was +1%. This is a slight improvement on the -2% of the previous quarter but is significantly down on the +9% of the same quarter one year ago.
Donald MacRae, chief economist, Lloyds TSB Scotland, said: "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.
"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."
Service businesses are showing a greater deterioration. The overall net balance for turnover for the three months ending November was -16%, significantly worse than the +1% of the previous quarter and the -8% of the same quarter one year ago.
Volumes of repeat business improved slightly with a net balance of -5% this quarter compared to -8% in the previous quarter and similar to the -6% of the same quarter one year ago. Trends in the volume of new business were better with an overall net balance of -1% - an improvement on the -5% of the previous quarter and the -7% of the same quarter one year ago.
The overall net balance for export activity in the latest three months was -3% - worse than the 0% of the previous quarter but significantly better than the -17% of the same quarter one year ago.
Firms' assessment of their immediate prospects in the next six months had improved dramatically in the two Business Monitors at the end of last year and beginning of this year. Deterioration was evident in summer of this year. However, there has been a slight improvement in expectations in the latest Business Monitor.
Expectations for turnover in the next six months are showing an overall net balance of -5%. This is a slight improvement on the -7% of the previous quarter and a significant improvement on the -14% of the same quarter one year ago. Whilst almost half (49%) expect turnover to be static in the next six months, 23% expect turnover to increase against 28% who expect a decrease.
Production firms are more optimistic than service firms with production firms showing an overall net balance for turnover for the next six months at -2% compared to -8% for services firms
In one of the few areas of the Business Monitor to show an improvement, expectations for future export activity have risen The latest net balance for export activity for the next three months was +16% - a significant move upwards from the -3% of the previous quarter and a significant reversal from the -15% of the same quarter one year ago.
Expectations for the volume of repeat business were largely unchanged with an overall net balance of -6% for this quarter compared to -5% for the previous quarter and significantly up on the -11% of the same quarter one year ago. Expectations for the volume of new business are unchanged with the latest net balance at -5%, identical to the figure for the previous quarter and slightly up on the -7% of the same quarter one year ago.
