Growth for private-sector business

Dec 10 2012

Private-sector business grew marginally during "challenging" conditions last month, according to a report.

Output rose slowly, employment was unchanged and cost pressures continued last month, the Bank of Scotland's latest purchasing managers index (PMI) showed.

Donald MacRae, chief economist at the the bank, said: "The private sector of the Scottish economy grew marginally in November, with growth in the service sector offsetting a fall in manufacturing output.

"The Scottish economy is showing the strains of maintaining growth momentum against a background of weak domestic and international demand. Despite this challenging environment, employment was maintained in the month."

The PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 600 private manufacturing and service sector companies. It measured a fall from 50.7 to 50.3 between October and November.

A drop in the level of new work placed with businesses was blamed for the slowdown in output growth. The latest decrease was the fifth in as many months, which anecdotal evidence linked to weakening demand in domestic and international markets alike, the bank said.

A Scottish Government spokeswoman said: "The latest PMI report shows a marginal expansion in private-sector activity last month. This small improvement in private-sector activity is positive and issues concerning new work demonstrate the ongoing challenges we face in strengthening economic growth.

"Against a trend of flat growth and the OBR's latest forecast that the UK economy will contract by 0.1% in Q4, we welcome steps to boost capital spending. This investment is long overdue but the UK Government has still yet to outline a coherent plan to return the economy to growth.

"This Government is doing all it can within its current powers, but with the full fiscal and economic powers of independence we could do more to create the best possible environment for economic success.

"In the absence of those powers, the UK Government must invest further in jobs and growth."