The latest Purchasing Managers’ Index (PMI) from the Bank of Scotland reports that factory output here has increased for a second straight month. It prompted the bank’s chief economist, Professor Donald Macrae, to suggest that the recovery was “becoming more strongly embedded”, with economic activity last month in Scotland growing at its fastest rate since April 2011. Indeed, the report talks of “solid and accelerated increases” in output and new business at Scots firms, along with the fastest rise in employment for more than a year.
Professor Donald Macrae
Bank of Scotland
Although the pace of economic growth was broadly in line with the average across the UK as a whole, Scotland saw a stronger increase in employment than any other part of the UK, other than the West Midlands. The number of people in the workforce numbers grew at the fastest rate since February and has now risen in each of the past four months. The amount of new business has also increased for the sixth month in a row. The latest rise was the most marked in more than two years, with most of the demand coming from the home market — new export orders fell slightly on the month.
Although output prices rose for the fifth straight month, price inflation was now at an 11-month low. According to Professor MacRae, “Output grew in manufacturing and activity was strongly up in the large services sector, with an encouraging rise in new orders across the economy evident for the sixth month in succession. However, growth appears confined to the domestic market, with new export orders falling slightly in the month, illustrating the effects of the recession in the eurozone. These results,” he concluded, “show the recovery in the Scottish economy is becoming more strongly embedded with every passing month.”