Scottish economy continues recovery from Q1 slowdown
Scotland’s private sector continued to grow in June and the Scottish economy is making a “moderate recovery” from slowdown in the first quarter, according to a new Bank of Scotland report.
However, the growth is focussed on the services sector rather than manufacturing.
The bank’s seasonally adjusted Purchasing Managers’ Index (PMI), a single-figure measure of the month-on-month change in combined manufacturing and services output, fell slightly in June from 51.9 to 51.2.
The service sector was the primary driver of expansion, while there were marginal concurrent falls in manufacturing output and new orders.
Staffing levels were little changed in June, although marginal growth meant that net increases in employment have now been recorded for five months in succession. Services remained the primary source of job creation.
In contrast, manufacturers registered a slight fall in job numbers, reflecting excess capacity in the sector.
Donald MacRae, chief economist at Bank of Scotland, said: “June was another month of growth continuing the pickup in activity starting in April.
“But the growth appears confined to the services sector. In contrast manufacturing showed declining output, employment and new orders. New export orders showed a fifth consecutive monthly fall, illustrating the challenge of exporting with a strong pound sterling.
“The Scottish economy continues to make a moderate recovery from the slowdown of the first quarter.”