Reports out this week show that growth in Scotland’s private sector had slowed by the end March. The bad weather, which lasted in April, also hit the high street badly, with shops showing a 7% drop over the year.
Professor Donald Macrae
Bank of Scotland
The latest report from the Bank of Scotland‘s Purchasing Managers Index (PMI) does show that the private sector economy expanded last month, but only modestly and more slowly than the rest of the UK. Growth in Scots manufacturing continued to rise for the fourth month in a row but at a slower rate than before. There was no change at all in the volume of exports. However, it wasn’t all bad news — the PMI reported that companies were creating jobs in March at the fastest rate in eight months; even manufacturing businesses were recruiting extra staff though at modest rates.
Professor Donald MacRae, chief economist at the Bank of Scotland, pointed out that “the level of new business rose, accompanied by an increase in the number of jobs in both manufacturing and service sectors. But export activity was unchanged in the month. Input-cost inflation was marked across all sectors. The PMI has now been above the no-growth level of 50 for six consecutive months, suggesting the Scottish economy is continuing its slow recovery from recession.”
The PMI is made up from monthly replies to questionnaires sent to purchasing executives in about 600 manufacturing and service sector companies around the country. Anything above 50 represents growth; 50 means no change while anything below that figures suggests economic contraction. It registered at 51.1 for March, down from the 52.5 recorded for February.
Meanwhile, a separate report from the Scottish Retail Consortium says that the bad weather was responsible for a 3.8% drop in footfall in Scots shops, compared to this time last year. However, it also suggests that the position in Scotland was better than the rest of the UK where numbers fell even more sharply. It shows that the worst affected were retailers on the high street (down 7% on the year), while shopping malls showing a much smaller decline.
Fiona Moriarty
Director, Scottish Retail Consortium
According to the Scottish Retail Consortium’s director, Fiona Moriarty, “The coldest March for 50 years was to blame for putting off many Scottish shoppers, and measures up particularly badly against the much milder weather we had during the same month in 2012. Scottish footfall was above the UK average, but that makes it the second best of a bad bunch in a month when no areas showed growth. Retailers in Scotland will be hoping that the late onset of more Spring-like weather makes shopping trips and seasonal ranges more appealing to customers.”
The survey is compiled for the Retail Consortium by the consumer analysts, Springboard. One of its directors, Diane Wehrle, suggested that media attention around the Budget and benefit reforms had hit consumer confidence. However she pointed out that the final week of the month “…did yield some positive results, with retail park footfall significantly bolstered. Home-owners took advantage of the long Easter bank holiday to visit DIY out-of-town outlets. It’s key to bear in mind that March 2013 was much colder than in 2012, where most of the UK experienced unseasonable soaring temperatures, whereas rain, snow and bitter cold further encouraged shoppers to stay at home.”