Scottish private sector stabilises in April

Scotland's private sector stabilised in April after two previous months of contraction, a new survey out today says.

Alasdair Gardner said a contraction is possible. Picture: Ian Georgeson

The seasonally-adjusted Bank of Scotland purchasing managers’ index, covering manufacturing and services output, rose to the 50 “no change” mark last month from 48.5 in March. A figure below 50 represents contraction.

However, less positively, manufacturers reported a contraction in new orders for the eighth consecutive month and overall workforce numbers fell at their fastest pace since November 2010.

Alasdair Gardner, Bank of Scotland’s regional managing director Scotland, commercial banking, said: “Stabilising business conditions were the theme of April’s survey data, which is encouraging news for Scotland’s private sector after an intensifying downturn over the previous three months.

“However, firms still reported declines in their backlogs of work levels and employee numbers, suggesting that the economy could be poised to return into contraction.”

The latest data showed a further contraction in Scottish manufacturing output, while Scottish service providers maintained the same level of output in April as they had in March.

Thee was an increase in new business levels at Scottish service sector companies but “the rate of growth was slight and weaker than the long-run series average”.

Meanwhile, “job-shedding” was recorded in the services sector for the fourth month running, with a figure of 47.8 in April compared with 49.8 in March.