World Economy

Confidence Rises as Scotland Returns to Growth

The PMI increased from 49.4 in December to 50.3 in January.The PMI increased from 49.4 in December to 50.3 in January.

Scotland’s private sector economy returned to growth in January, after contracting the previous month, a key survey has revealed.

Manufacturing output grew last month, but the services sector recorded a marginal decline in output in January, according to the Bank of Scotland’s purchasing managers’ index report, SNA reported.

The PMI for Scotland, a composite measure of manufacturing and services output, increased from 49.4 in December to 50.3 in January on a seasonally-adjusted basis. This took it back above the level of 50 deemed to separate expansion from contraction.

However, the index signaled Scottish growth was weaker than even the modest rate recorded for the UK private sector economy as a whole in January. The UK output index fell from 54.9 in December to 53.5 in January.

Although the index was significantly ahead of that recorded in Scotland, the fall did signal a significant slowing of the UK growth rate last month from an already modest pace in December.

A composite measure of UK manufacturing, services and construction sector output in January, published last week by the Chartered Institute of Procurement & Supply, pointed to a quarterly growth rate of just 0.3%.

The manufacturing output index in the PMI Scotland report dipped from 53.1 in December to 52.2 in January, to signal a slowdown in this sector, but it remained significantly above the 50 no-change mark. The Scottish services activity index rose from 48.5 in December to 49.8 last month to signal a slowing of the pace of contraction of this key sector.

Overall, the PMI Scotland survey signals a modest rise in employment in the private sector economy north of the border in January. The employment index rose from 50.8 in December to 51.2 in January. 

Both the Scottish manufacturing and services sectors recorded growth in employment last month.

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