PMI shows Scotland as resilient despite the slowdown

The Scottish economy is “displaying resilience” in the face of a global slowdown, as private sector activity “expanded solidly” in August despite slowing since July, according to a report out today.

The latest Bank of Scotland PMI (Purchasing Managers’ Index) found manufacturing production increased at the sharpest pace for four months, although there was a “marginal decline” in Scottish private sector employment ending a six-month period of job creation. Overall, the rate of growth slowed since July due to the weakest monthly rise in service sector activity since January.

The private sector output in Scotland grew for the eighth month in a row last month, but the index reading of 52.7 in August was down from 53.5 in July. An index reading above 50 indicates an overall increase, below 50 an overall decrease.

The Bank of Scotland PMI report says: “The latest expansion in total activity predominantly reflected higher levels of new business. Boosted by a robust rise in manufacturing orders, total new work in Scotland increased at the fastest pace for four months.”

Donald MacRae, chief economist at Bank of Scotland, added: “With an eighth consecutive month of growth, this is an encouraging PMI. Growth remained solid bringing the PMI Output Index second only to London within the UK. This is a welcome result, suggesting the private sector of the Scottish economy grew, albeit slowly, throughout January to August.

“Manufacturing output accelerated at the sharpest rate for four months, while new orders increased for the eighth consecutive month. There was a particularly welcome rise in new export orders.

“Although the services sector saw growth, it was the weakest monthly rise in activity since January. The rate of expansion in services has slowed over the summer.”