Tough July for private-sector companies as demand and output drops
Scotland's private-sector firms experienced a challenging July, with demand for their goods and services deteriorating at the sharpest pace in almost four years, a report has found.
Scotland's private-sector firms experienced a challenging July, with demand for their goods and services deteriorating at the sharpest pace in almost four years, a report has found.
Bank of Scotland recorded the most marked decline in new order intakes since August 2012.
There was also a marginal drop in output last month, returning it to ''contraction territory''.
Despite average cost burdens increasing, there was better news on the jobs front. Workforce numbers were found to have stabilised during July, ending seven months of job shedding.
The figures are contained in the bank's latest purchasing managers' index (PMI), produced by IHS Markit.
It keeps track of the month-on-month changes in combined manufacturing and services output - and found that fell to a four-month low during July.
The report stated: ''The return to contraction territory was broad-based across manufacturers and service providers after both recorded declines in their business activity. Demand for Scottish goods and services deteriorated at the sharpest pace for nearly four years during July. Moreover, the decline ended a three-month period of growth.''
On costs, the PMI found Scotland's private-sector companies left their selling prices broadly unchanged last month, having lowered them marginally in June.
Data highlighted a further increase in average cost burdens for firms, continuing a trend in place since February.
Graham Blair, regional director of SME Banking Scotland, said: ''The start of the third quarter was challenging for Scottish private-sector firms as declining demand conditions knocked the economy back into contraction during July. New business levels fell at the sharpest pace for nearly four years, with the decrease across both manufacturers and service providers.However, it is encouraging to see employment levels stabilise. Following the outcome of the EU referendum, it is still too early to understand the full impact for businesses across Scotland but we are ready to support them so that they are well positioned to meet any challenges ahead.''