Construction is having a "hard time"

The insolvency survey concluded that there had been a 36% increase (rising from 92 to 102) in the number of court liquidations between the last quarter of 2000 and the first quarter of 2001.

It also concluded that there had been a 4.9% increase in the number of creditors' voluntary liquidations over the same period.

These figures, according to Grant Thornton partner, Matt Henderson, point towards tough times for the Scottish economy.

Mt Henderson said: "Anecdotally people have mentioned that there has been an increased number of corporate insolvencies since the turn of the year and these figures certainly back this up.

"If you look at the figures for liquidations of Scottish companies over the last three years, you find a fairly static number of corporate failures.

'Indications of recession'

"However, the first quarter figure for 2001 indicates some worrying signs of a slow down in the Scottish economy and the first possible indications of recession."

Mr Henderson said the failures seemed to be across all sections of the economy but he said that construction, manufacturing, wholesale and retail continued to "have a hard time".

He added: "Looking forward we would expect additional pressures of the foot-and-mouth epidemic to be evident on business dependent on rural access, such as country hotels, shops and restaurants.

"We believe that the headline stories about larger firms such as Motorola may be concealing an underlying trend of serious difficulties amid the small mid-tier companies and that these figures are the early signs of growing problems within the Scottish economy."