Economy Enjoys Continued Growth

Scotland's economy is continuing its moderate recovery after a slowdown at the beginning of the year, according to a report.

The Bank of Scotland's monthly purchase managers index (PMI) - which measures performance in manufacturing and services by gathering data from around 600 companies - signalled continued economic growth in June, although it was down slightly compared with the previous month.

The services sector was again the primary driver of expansion, recording an increase in activity in line with higher levels of new business.

In contrast, there were marginal falls in manufacturing output and new orders, with reports that weakness in the oil and gas sector, plus unfavourable exchange rates, had weighed on demand.

The latest data shows staffing levels remained almost unchanged in June, although marginal growth means employment has risen for the fifth month in a row.

Services remained the primary source of job creation, while manufacturers registered a slight fall in job numbers.

Service providers recorded a much steeper increase in their operating expenses relative to manufacturers, reported to be the result of higher salary costs.

Donald MacRae, chief economist at Bank of Scotland, said: "June was another month of growth continuing the pick-up in activity starting in April.

"But the growth appears confined to the services sector. In contrast manufacturing showed declining output, employment and new orders.

"New export orders showed a fifth consecutive monthly fall, illustrating the challenge of exporting with a strong pound sterling.

"The Scottish economy continues to make a moderate recovery from the slowdown of the first quarter.''

Business Minister Fergus Ewing said: "We welcome the latest results from the PMI, which signalled continued expansion in private sector activity in Scotland in June. Services was at the forefront of the growth in both output and employment.

"Whilst conditions remain challenging for manufacturers, with many citing the strength of the pound as a barrier to exporting, the composite indicator for new business signalled continued expansion and recent independent forecasts suggest a positive outlook for the rest of 2015.''