More than half of firms surveyed had increased turnover

The Lloyds TSB Scotland Business Monitor found that 53% of firms surveyed had shown an increase in turnover for the last quarter.

In the three months to the end of November, a further 28% of companies reported a static turnover and 19% showed a decrease.

The net balance was 34%, compared with 22% in the previous quarter.

The latest figures were more than four times the 8% of the same quarter a year ago, Lloyds TSB said.

Scottish businesses are benefiting from the pick-up in growth from both the UK and Eurozone economies Professor Donald MacRae Lloyds TSB Scotland

They also represented the second highest quarterly rate reported in the nine-year history of the Business Monitor.

It found that turnover remained positive in both production and service businesses, although the manufacturing sector continued to report stronger results than services.

Expectations for turnover in the next six months remain at a high level with a net balance figure of 30%, up from 11% in the same quarter of 2005.

Interest rates

Service businesses showed stronger expectations with a net balance figure of 35% compared with 24% for production businesses.

Professor Donald MacRae, chief economist at Lloyds TSB Scotland said: "Scottish businesses are benefiting from the pick-up in growth from both the UK and Eurozone economies.

"The Scottish economy continues to grow above its trend rate whilst expectations for future growth continue at high levels.

"Despite recent increases, both the rates of interest and inflation remain at historically low levels.

"The Scottish economy should grow at around 2.25% in 2007."