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Private Sector Growth Bounces Back
Economic growth in the private sector has bounced back after a slowdown in September, a new report indicates.
A monthly survey by the Bank of Scotland found that the upturn in October was driven by strong growth in service businesses.
The level of new work placed with firms was at a three-month high but new orders in the manufacturing sector continued to fall due to weakness in export sales, the bank said.
Its Purchasing Managers' Index (PMI) collects information from around 600 companies operating in the manufacturing and service sectors.
Donald MacRae, chief economist at Bank of Scotland, said the growth followed a "referendum induced low'' the previous month.
He said: "Both services and manufacturing sectors recorded growth with a welcome increase in the level of new business particularly in financial services.
"But the level of new export orders at manufacturers fell for the fourth month in succession illustrating the effect of the slowdown in the Eurozone.
"The Scottish economic recovery continues but at a reduced rate compared to the first half of the year.''
The rate of job creation eased to a 10-month low as businesses reported being able to keep on top of their workloads.
Despite this, staffing levels at service firms have now increased for 29 months in a row, according to the report.
Job creation at manufacturing businesses also picked up slightly in October, although was still below highs recorded earlier in the year.
Welcoming the findings, a Scottish Government spokeswoman said: "The pace of growth accelerated compared to the previous month, in contrast with the UK where it slowed down.
"In Scotland, the pick-up in growth in October was broad-based across both services and manufacturing, with the pace of expansion in services activity at a three-month high.
"Alongside this, the survey also signalled continued employment growth across the services and manufacturing sectors.
"However, the PMI also highlights that conditions for manufacturing exporters remain challenging with the weaker outlook in Scotland's key export market, the eurozone.
"Nevertheless, with this the 25th month of expansion in the PMI, and recent GDP figures showing Scotland's economy growing continuously for two years, the economic outlook remains upbeat''.
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