Business shows 'signs of revival'

Exporters are more optimistic than domestic companies

Scotland's businesses have shown some signs of greater confidence, according to a survey by the Bank of Scotland.

The half-yearly report has revealed that companies were more hopeful of an increase in sales and orders than they were six months ago.

However, many firms expected profits to fall and have said that recruitment and investment plans remained on hold.

The survey followed 2,500 UK companies and recorded their views on their prospects for the coming year.

Scottish firms expecting an increase in sales rose to 36% with 31% braced for a fall, making a balance of +5%. That compares with a balance of -25% at the beginning of the year.

Businesses will need support in order to ensure the momentum of any recovery Donald Kerr head of commercial banking

Despite fresh hopes for a rise in sales, the survey said profits were likely to remain under pressure with four out of ten companies expecting them to tumble.

There was some improvement in the number of businesses expecting to increase staff levels.

Of the firms surveyed, 17% expected to take on staff while 24% planned to reduce their workforce, making a balance of -7%. That was an improvement on the balance of -27% in the last survey.

Exporters appeared to be faring better than domestic companies with more than a third saying they expected to increase exports.

The report said business confidence had improved in all sectors.

The Bank of Scotland's head of commercial banking, Donald Kerr, said the survey indicated a levelling off in the downturn rather than a return to strong growth.

He said: "For the time being, profits will remain under pressure and investment will be on the backburner. And that means businesses will need support in order to ensure the momentum of any recovery."