This latest edition for the three months ending 30 November 2008 shows 51 per cent of firms surveyed reporting a decrease in turnover, 29 per cent reporting static turnover and 20 per cent reporting an increase, giving a net balance of -31 per cent, down dramatically from the previous quarter's figure of -10 per cent and markedly different from the +16 per cent recorded for the same quarter one year ago.
Once again services are affected more than manufacturing, with service businesses reporting a net balance for turnover of -35 per cent and production -23 per cent. Both sectors are now experiencing their worst result since the start of the Business Monitor.
Yet again the service sector is experiencing a slump in the volumes of repeat and new business. The number of service firms experiencing a fall in turnover due to the volume of repeat business was almost four times the number who reported an increase giving a net balance of -31 per cent. New business figures were poorer with a net balance of -38 per cent. Together with corresponding figures from the production sector of -20 per cent and -19 per cent respectively, these are the poorest results recorded in the history of the Business Monitor.
Expectations of increasing turnover in the next six months continue to slump. The overall balance for turnover for the next six months is -44 per cent, a dramatic decline from the +17 per cent of the same quarter one year ago. Expressing the depth of the fall in confidence, only 10 per cent of service businesses expect turnover to increase in the next six months compared to 60 per cent who expect a decline.
Professor Donald MacRae, chief economist, Lloyds TSB Scotland said: "Scotland is certainly feeling the full effects of the credit crunch, with the worst results on record in the 11 years of the Lloyds TSB Scotland Business Monitor. The Scottish economy is in the midst of a severe slowdown which has yet to bottom out. Recession beckons for the Scottish economy."
