There was a further slowdown in the pace of growth of the Scottish private sector economy last month, according to the latest Bank of Scotland PMI.
It said that this reflected a second successive drop in new business, with firms working through backlogs of work to sustain output growth. Businesses continued to cut staff numbers, while dealing with inflationary pressures.
October’s Bank of Scotland PMI – a seasonally adjusted index monitoring activity across Scotland’s manufacturing and service industries – read 51.0, down from 51.9 in September, and signalled a modest month-on-month increase in activity.
Growth was the slowest in the current 10-month sequence, as rates of expansion of goods production and service activity both eased to similarly mild paces.
New business received fell for a second consecutive month in October, with a marked fall in the demand for manufactured goods underlying the latest decline. Service providers, meanwhile, saw a modest pick-up in new business following September’s contraction.
Scottish manufacturers registered a moderate rise in headcounts in October, while their service-providing counterparts cut jobs. Employment within the Scottish private sector overall fell for a third month running, albeit at the weakest rate in this sequence.
Reflecting a further drop in new order book entries, business outstanding in Scotland’s private sector fell markedly in October, and at the sharpest rate since April 2010. The fall in backlogs of work was led by a sharp decrease in the manufacturing sector.
Donald MacRae, chief economist at Bank of Scotland, said: “The October PMI recorded its tenth consecutive positive month this year indicating the private sector of the Scottish economy continued to grow albeit only marginally. However
