FTAdviser.com

Advertising

In the three months up until 31 May, 39 per cent of firms surveyed reported an increase in turnover, while a further 33 per cent said turnover had been static. Only 29 per cent reported a decrease.

The responses mark a +11 per cent improvement on the previous quarter, but are still only a third of that recorded for the same quarter last year.

As a result, expectations of increasing turnover in the next six months have fallen sharply, reinstating the trend of falling expectations from earlier quarters.

Concerns over credit availability have risen among both services and production businesses, with service businesses experiencing their highest level of concerns since the Business Monitor was launched 10.5 years ago.

Chief economist, Lloyds TSB Scotland Professor Donald MacRae said: "Although Scottish economic growth is continuing it is still at a reduced rate. However, consumer confidence remains high enough to result in retail sales increasing at an annual rate of 8 per cent.

He added: "The Business Monitor has recorded a slowing in the Scottish economy while business expectations for the next six months have fallen. Concerns surrounding credit availability and the costs of credit have risen.

"After above trend growth in 2007, the Scottish economy is facing reduced growth in 2008 in the range of 1.5 per cent to 1.75 per cent."