Private sector employment growth in Scotland last month was faster than that in any other UK nation or region, a key survey shows.
Growth of Scotland’s private sector economy meanwhile accelerated in February, according to Royal Bank of Scotland’s latest purchasing managers’ index report published today.
The headline Scotland business activity index - which measures the month-on-month change in the combined output of the manufacturing and services sectors - rose to 52.1 in February from 51.7 in January on a seasonally adjusted basis to signal the strongest expansion in private sector output since June last year.
Royal Bank observed: “Similar to that seen in January, growth in output was concentrated in the service sector. That said, a softer contraction in manufacturing output meant that the downward pressure on overall performance eased somewhat.”
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Employment growth in Scotland’s private sector economy strengthened in February.
Both manufacturing and services recorded growth in staffing levels, with the overall rate of job creation accelerating to a nine-month high.
This put Scotland top of the employment growth table among the UK’s 12 nations and regions in the survey.
Employment growth in Scotland was significantly faster than that in London, which was in second place.
Scotland was ranked eighth among the 12 UK nations and regions for its business activity index reading. It was ahead of south-west England, Yorkshire and Humber, north-east England and Wales, which all recorded business activity index readings below the level of 50 deemed to separate expansion from contraction.
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A fresh but modest rise in new business was recorded across Scotland during February, ending a seven-month run of contraction, Royal Bank observed.
It added: “The latest upturn was solely driven by a stronger uptick in new business received at service providers; amid reports of a growing client base, new contract wins, increased advertising and commencing of new projects. Meanwhile, goods producers signalled a further sharp contraction in factory orders.”
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Judith Cruickshank, who chairs Royal Bank’s Scotland board, said: “February numbers for Scotland signalled solid gains across the private sector. The fresh growth seen at the start of the year was sustained and even strengthened, as the downward pressure from the manufacturing sector dissipated slightly, and growth across the service sector was maintained.
“However, the latest expansion across the Scottish private sector was heavily reliant on the service sector, while goods producers failed to perform under the weight of a worsening demand climate. That said, the recent expansion in employment across both the sub-sectors alludes to more balanced growth in the coming months."
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