The Courier & Advertiser (Perth and Perthshire Edition)
Private sector enjoys rousing start to year
SCOTLAND’S PRIVATE sector enjoyed a rousing start to the year, with an accelerated rise in new business, according to a report published today.
The first Bank of Scotland Procurement Managers’ Index showed the upturn in the privatesector economy regained momentum after growth eased in the latter months of last year.
According to the report, the rise in new business last month boosted both output and job creation.
Input price inflation meanwhile dipped from December’s nine-month high, but nevertheless remained strong and led businesses to raise output prices at a faster rate.
Last month saw the most marked increase in combined manufacturing and service sector output for three months, with the rate of growth only just below the survey highs reached last summer.
New business rose at its fastest rate since last October.
Manufacturers and service providers alike recorded strong expansions in new work, with the former also signalling a return to modest growth in new export orders after two months of decline.
Employment at Scottish private-sector businesses rose for the 14th month in a row during January, the longest sequence of net job creation in nearly six years.
In line with stronger growth in both output and new business at the start of the year, the degree to which employment rose was more marked than in December.
The level of work-inhand — in progress and not as yet started — also increased again. However, this growth was at its slowest rate in the last eight months.
Input price inflation north of the border eased to a three-month low in January, reflecting a moderation in the rate of increase in services firms’operating costs.
Cost inflation was nevertheless stronger than the UK average, with staff and raw materials reported by panellists to be the key sources of inflationary pressure.
“Output grew strongly in both manufacturing and service
sectors.”
Increased demand, meanwhile, provided businesses with greater pricing power last month, leading to the fastest rise in average output charges since last July.
Donald MacRae, chief economist at Bank of Scotland, said: “Output grew strongly in both manufacturing and service sectors, accompanied by rising employment and increasing levels of new business.
“The growth in new export orders after two months of decline is particularly welcome.
“Business conf idence continues to increase, ensuring the Scottish economy not only continues the recovery but enters 2014 with growth momentum,” he added.