Coronavirus: Scottish economy hit by virus 'shockwaves'

The economy has been hit hard by the impact of the virusImage source, Getty Images
Image caption,
The economy has been hit hard by the impact of the virus

Scottish firms shed jobs at the fastest rate for more than 20 years last month amid "shockwaves" from the coronavirus pandemic, according to a survey.

The services sector reported its steepest drop in activity since the Royal Bank of Scotland Purchasing Managers Index (PMI) began in 1998.

Meanwhile, manufacturing output fell at its sharpest rate since early 2009.

The survey also indicates Scotland outpaced the rest of the UK in terms of job cuts last month.

The record drop in overall business activity was attributed to "tumbling" client demand.

And the business activity index - which measures both manufacturing and service sector output - posted 29.7 in March, dropping from 50.1 in February.

Any figure below 50 suggests economic contraction.

Image source, Getty Images
Image caption,
Manufacturing output fell at its sharpest rate since early 2009, according to the survey

The March survey data signalled a record decline in overall new business, with panellists linking the fall to weak client demand caused by the coronavirus outbreak.

Of the 12 monitored UK areas, only Northern Ireland reported a sharper decline.

The survey also suggested that confidence among Scottish firms collapsed in March.

For the first time since PMI records on optimism began nearly eight years ago, private sector firms said they expected activity to decline in the coming year.

Malcolm Buchanan, chairman of the RBS Scotland board, said: "With emergency measures still in place, and demand unlikely to recover in the near future, March data paint a worrying picture for the Scottish private sector.

"The impact of the Covid-19 pandemic is likely to be felt for a while.”