By Ian McConnell

THE Scottish private sector economy recorded a renewed downturn in October, with output falling sharply, and the pace of job-shedding accelerated to its fastest since July, a key survey shows.

Royal Bank of Scotland’s headline business activity index for the private sector economy north of the Border, which covers manufacturing and services, dropped from 51.2 in September to 43.2 in October on a seasonally adjusted basis, taking it back below the level of 50 deemed to separate expansion from contraction. The manufacturing sector recorded a rise in activity last month, with the overall decline driven by services.

Scotland saw the sharpest drop in business activity of any of the 12 UK nations and regions surveyed, eight of which achieved growth last month. Wales also saw a sharp fall in output last month, with south-west England and Northern Ireland seeing modest declines. In all of the other eight parts of the UK which saw growth last month, the rate of expansion weakened from that in September.

Royal Bank’s latest PMI (purchasing managers’ index) report, published today, also shows the private sector economy in Scotland last month recorded the sharpest decline in new business of any of the 12 UK nations and regions.

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The sharper decline in Scottish private sector employment in October marked a ninth consecutive month of job-shedding. Only the West Midlands recorded a steeper fall in employment than Scotland in October.

Malcolm Buchanan, who chairs Royal Bank’s Scotland board, said: “Renewed lockdown restrictions seem to have staved off the recovery in the Scottish private sector during October.”

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He added: “Output declined sharply amid a marked contraction in the level of new business, although the falls were still less sharp than in the spring.

“Unsurprisingly, the service sector bore the brunt of the impact, registering a rapid drop in activity that outweighed a further uptick in manufacturing output.”