The latest economic report from the the Bank of Scotland shows the fastest rise in business activity for a year, in both manufacturing and service industries, with an equally rapid rise in employment. The monthly purchasing managers’ index for April suggested that the growth was largely down to improved demand elsewhere in the UK, though it indicated that Scotland outperformed the rest of the country. This marks the fifth monthly increase in the volume of new work placed with businesses. However, there was no change in the level of exports and some firms warned that unfavourable exchange rates meant that they were having to pay more for energy, food and some imported items.
Professor Donald Macrae
Bank of Scotland
The Bank’s chief economist, Professor Donald MacRae, said the results suggested the Scottish economy was “beginning a more robust recovery. April’s PMI climbed to a twelve month high signalling growth in the private sector of the Scottish economy at the start of the second quarter of the year. Both business activity and employment grew in the manufacturing and services sectors while the volume of new business rose for the fifth month in a row.”
Responding to the figures, Finance Secretary John Swinney said: “We welcome this further positive evidence that Scotland’s economy is improving and note that private sector business activity in Scotland expanded for the seventh consecutive month in April, reaching a 12-month high. We recognise that market conditions remain challenging and that is why the Scottish government remains committed to investing in jobs and training as well as ensuring we have the most competitive business environment anywhere in the UK.”
Meanwhile, another report, this time from accountants BDO LLP, suggested that business confidence had improved in Scotland last month, driven by “steadily climbing optimism levels” in the services sector. However, it pointed out that overall UK business confidence was still below the level which would indicate growth, as the outlook for the manufacturing sector remains bleak.