Economic activity in Scotland 'still on hold'
- 8 November 2010
- From the section Scotland
The Scottish economic recovery remained on hold last month, according to the latest survey of business managers.
Economic activity was described as "broadly static" during October in the Bank of Scotland Purchasing Managers' Index (PMI) report.
The rate of new business declined for the first time in nine months, despite firms adding to their workforces.
But business and financial services saw their strongest expansion in five months.
Donald MacRae, chief economist at Bank of Scotland, said the expansion in business and financial services was very welcome.
He added: "Scottish firms continued to add to their workforces during October, although the rate of job creation remained weak.
"The Scottish economy has slowed but has not gone into reverse."
The report showed activity in the services sector fell for the second month in a row, which was attributed to a decline in travel, tourism and leisure.
A mild rise in manufacturing output was noted after a slight fall in September's report.
The marginal decline in the Scottish economy contrasts with the trend seen across the UK as a whole, where a mild acceleration of growth was recorded.
Cost inflation was at its highest in five months with companies blaming rising raw material and fuel costs for the hike, while the increase in the national minimum wage pushed up staffing costs.
Responding to the data, a spokesman for Finance Secretary John Swinney said that although there were positive indications, it was clear that Scotland's recovery remained fragile.
The PMI report, compiled by Markit for Bank of Scotland, is based on data from purchasing executives in about 600 private manufacturing and service sector companies.