Scots growth still lags the rest of UK

SCOTLAND'S private sector economy grew again in December, but continued to lag behind the UK as a whole, causing "concern" among economists.

Output in Scotland rose for the sixth consecutive month, but the pace of expansion had slowed since November, according to a report published today by financial information firm Markit.

Production at manufacturing plants slowed and employers reported spare capacity, meaning firms were "cautious" on hiring staff, according to the purchasing managers index (PMI) survey.

Markit's seasonally adjusted business activity index posted a reading of 54.1 last month, down from 54.3 in November. Any reading above 50 indicates growth.

Firms reporting rising output in December largely attributed the increases to new order growth, although new order levels lagged behind the UK-wide level.

December's data signalled a fractional rise in head counts in Scotland, with a better performance than that seen across the UK overall.

Input price inflation accelerated for the seventh consecutive month, due to higher commodity prices, wage costs and supplier charges. Today's data signalled the sharpest monthly rise in average costs since October 2008.

Andrew Self, an economist at Markit, said: "These data highlight further expansions of activity and new business in the Scottish economy. However, the recovery continues to lag behind that seen across the UK as a whole.

"While the inability of Scotland's recovery to match that seen across the UK is a concern … the Scottish economy ended 2009 in a markedly better state than that in which it began."