New research indicates increased prosperity for Scotland

Its index of leading economic indicators suggests the upward trend will continue well into 2004.

The research is based on a broad range of measures and is intended to anticipate future performance.

This is the seventh successive month in which the Bank of Scotland data has shown improving economic conditions.

For the past year, the bank has been tracking measures which indicate how the economy is performing.

Its latest index confirms a picture of steady improvement.

Among the measures contributing to this trend were last month's totals for new car registrations.

With interest rates still relatively low, consumers remain suitably encouraged to make significant purchases on credit Shane O'Riordain Bank of Scotland

These indicate that demand for cars in Scotland has increased for eight months in a row.

By using these figures as part of a basket of 10 economic measures, the Bank of Scotland and NTC Research believe they can make a reasonable prediction for the coming six to nine months.

Other factors contributing to the positive outlook include a steadying of investor confidence, with share prices rising steadily during most of last year.

Industry hopes

Commenting on the latest results, Shane O'Riordain, group economist at the Bank of Scotland said: "With interest rates still relatively low, consumers remain suitably encouraged to make significant purchases on credit - such as cars - and the housing market remains buoyant."

"However, with interest rates set to rise over the coming months, it is hoped that industry can begin to drive the economy forward.