‘Growth returns’ to Scottish economy

The economic slowdown seen in the first quarter of this year is gradually being reversed, according to a survey of Scottish purchasing managers.

The Bank of Scotland found both employment and new business increased in April.

There was marginal growth in business activity for service sector companies.

But manufacturers registered a modest contraction, with exporters appearing to suffer from the effects of low growth in the eurozone.

The bank’s monthly PMI – which measures changes in combined manufacturing and services output – improved to 50.7 during April, from March’s 49.4.

Any reading above 50 suggests economic expansion.

Although last month’s figure indicated only marginal growth, it was the best reading recorded by the survey so far this year.

The survey showed services firms picked up new business, reportedly benefiting from increased marketing and a rise in market confidence.

Growth was registered in the business services and travel, tourism and leisure categories, but a slight fall was seen in financial services.

Manufacturers reported a fall in new export business, in part due to unfavourable exchange rates with key trading partners.

On the jobs front, employment grew for a third successive month, with some companies expecting business expansion over the coming months.

Service sector companies were the primary source of higher employment, as manufacturing payroll numbers declined slightly.

Bank of Scotland chief economist Donald MacRae said: “The slowdown of the first three months of this year is slowly being reversed with both employment and new business increasing in April, suggesting a return to a more normal growth rate in the second quarter.”

Source: BBC News