Scottish economy showing resilience, says bank survey
- 12 September 2011
- From the section Scotland business
The Scottish economy is showing resilience in the face of a global slowdown, according to a Bank of Scotland survey.
The bank's latest Purchasing Managers' Index (PMI) indicated Scottish private sector activity expanded solidly in August.
Manufacturing production increased at its sharpest pace for four months.
But the survey also suggested the services sector had its weakest monthly performance since January.
And despite both higher activity and the steepest rise in demand for four months, employment fell for the first time in seven months.
Meanwhile, output prices increased only moderately as Scottish firms absorbed a large proportion of sharp cost inflation.
The bank said growth remained solid and above the UK average rate of expansion, despite slowing slightly as service sector activity growth moderated.
In the rest of the UK, only four of the nine English regions posted increases in private sector business activity in August. London remained the top performing region, despite growth slowing sharply since July.
According to the survey, the latest expansion in overall activity in Scotland largely reflected higher levels of new business.
Total new work north of the border increased at its fastest pace for four months, boosted by a "robust" rise in new manufacturing orders.
Overall growth, however, was dampened by only a marginal increase in new business at service providers.
Bank of Scotland chief economist Donald MacRae said it was an "encouraging" survey.
He added: "This is a welcome result, suggesting the private sector of the Scottish economy grew, albeit slowly, throughout January to August this year.
"Manufacturing output accelerated at the sharpest rate for four months, while new orders received by manufacturing firms increased for the eighth consecutive month.
"There was a particularly welcome rise in new export orders which extended the current sequence of growth to ten months."
He added: "Although the services sector saw growth, it was the weakest monthly rise in activity since January.
"The rate of expansion in services has slowed over the summer, with employment falling for the third month in a row.
"Nevertheless, the Scottish economy is displaying resilience in the face of a global slowdown so far."
Sustainable Growth Secretary John Swinney said: "The report for August shows that private sector business activity in Scotland grew for the eighth month in a row.
"It is particularly encouraging to see signs that manufacturing output accelerated at its fastest rate for four months, with new orders increasing for the eighth consecutive month.
"Overall growth remained solid and above the UK average of expansion. This is underpinned by a solid rise in new orders received by Scottish manufacturing with total incoming new business increasing at the fastest pace since April."