Monday, 09 November 2021 09:07

Scottish private sector rebounds with growth in October

Donald MacRae, chief economist at Bank of Scotland

Scotland’s private sector has returned to “expansionary territory” in October, with incoming new business stabilising after September’s fall, according to the latest Bank of Scotland PMI.

The seasonally adjusted headline figure – a measure of the month-on-month change in combined manufacturing and services output – rose to 50.9 for the month, up from 49.0 in September. Growth was mainly driven by the services sector, with little change in manufacturing.

Over the month, workforce numbers increased and companies’ backlogs of work declined. Incomplete business has now decreased in each of the past ten months.

Volume of new business at Scottish private sector companies stabilised in October, with incoming new orders “broadly unchanged” following a fall in September. However growth in the service sector was partly offset by a decline in manufacturers, who reported lower volumes of new orders from both domestic and foreign clients.

Donald MacRae, chief economist at Bank of Scotland, said: “October’s PMI was 50.9 showing a welcome recovery from September's 49.0. Output increased modestly in services and marginally in manufacturing. These results confirm the summer slowdown in the Scottish economy has been arrested giving slow growth rather than no growth going into the third quarter of the year.”

Deputy First Minister John Swinney said: “We welcome the Bank of Scotland’s PMI for October published today which signalled a strengthening in private sector activity at the start of Q4 2015. The survey reported expansion in both manufacturing and services activity over the month. Furthermore, the indicator for employment signalled continued improvements over the month.

“Last week, the Fraser of Allander Institute forecast that the Scottish economy will continue to grow and unemployment will continue to fall over the forecast period.

“With this in mind, the Scottish Government will continue to use every power at our disposal to grow the economy and create jobs.”

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