New business boost private sector growth
Marginal growth in Scotland's private sector last month was driven by a slight increase in new business, a report has shown.
Marginal growth in Scotland's private sector last month was driven by a slight increase in new business, a report has shown.
The Bank of Scotland's monthly purchase managers index (PMI) - which measures performance in manufacturing and services by gathering data from about 600 companies - indicated a return to expansion territory.
December's figure was 50.3, up from 49.8 recorded the previous month. Anything above 50 constitutes growth, 50 means no change and below 50 suggests economic contraction.
Experts said the latest figure signalled a fractional improvement in output led by service providers, as manufacturers registered a further decline in production.
New business received by Scottish private sector companies increased during the month but the rate of growth was marginal.
While the service sector reported a modest expansion in new work, manufacturing companies registered a solid contraction in incoming new orders, the survey showed.
Staffing numbers also declined for the first time since July with manufacturers linking falling employee numbers to necessary redundancies.
Alasdair Gardner, Bank of Scotland regional managing director in Scotland for commercial banking, said: Despite returning to expansion territory, Scottish manufacturers struggled to cope with a lack of new orders from both domestic and foreign markets. This acted as a brake on overall output growth.
On a positive note, service providers showed signs of economic optimism, with headcounts and new business levels expanding.
However, these improvements were marginal, and insufficient to propel the economy in a higher gear at the end of 2015.''
Deputy First Minister John Swinney said: We welcome the Bank of Scotland's PMI which indicated expansion within the private sector at the end of 2015. In particular, the PMI signalled continued expansion in service sector output as well as further growth in new business.
However, the survey also highlighted that conditions continue to be challenging for exporters in the manufacturing sector in light of the subdued global economic picture.
As challenges remain within the economy, the Scottish Government will continue to work with businesses to focus on growing the economy and promoting Scotland as a great place to do business.''