Positive start to fourth quarter for economy – but challenges remain

Employment and output increased in Scotland’s private sector last month.

The October purchasing managers index from Bank of Scotland (BoS) reported a positive start to the fourth quarter with the headline PMI measure – a single figure encapsulating month-onmonth output change within the combined manufacturing and services sector – edged upwards to 52.7 from September’s 52.2.

The bank said that in line with higher output, employment also rose in the period, albeit at a moderate rate.

However, the study found that companies were continuing to face cost challenges.

“The upturn was broad-based, with both manufacturing and service output expanding at quicker paces,” Fraser Sime, BoS regional director commercial banking, said.

“Latest data also pointed to an overall expansion in new business orders, although growth was only evident in the service sector.

“Manufacturers received slightly fewer new business orders albeit higher output allowed backlogs of work to clear.

“Input costs continued to remain in sharp inflationary territory amid reports of higher raw material prices and wage bills.

“Nonetheless, higher labour costs did not deter businesses from taking on more staff.

“The rate of job creation quickened to a modest pace.”

Private sector output improved in Scotland in October.