Drop in pri­vate sec­tor ac­tiv­ity for first time in 10 months

The Press and Journal (Aberdeen and Aberdeenshire) - - BUSINESS - BY STAN AR­NAUD

Pri­vate sec­tor busi­ness ac­tiv­ity fell for the first time in 10 months dur­ing De­cem­ber, ac­cord­ing to the lat­est find­ings of the Royal Bank of Scot­land’s (RBS) pur­chas­ing man­agers’ in­dex (PMI).

Re­leas­ing the data to­day, the bank said the drop co­in­cided with a fresh de­cline in new sales, while back­logs of work also fell.

The sea­son­ally ad­justed RBS PMI dropped to 49.3 last month, from 52.2 in Novem­ber.

Mal­colm Buchanan, chair­man of RBS’s Scot­land board, said: “Scot­land’s pri­vate sec­tor fin­ished 2018 as one of only two places across the UK which reg­is­tered a re­duc­tion in busi­ness ac­tiv­ity dur­ing De­cem­ber, con­trast­ing with the mod­est growth re­ported for the rest of the coun­try.

“For­ward-look­ing in­di­ca­tors sug­gest a chal­leng­ing time ahead, with new sales de­clin­ing for the first time in 10 months and em­ploy­ment in­creas­ing only marginally.

“Com­pet­i­tive pres­sures, un­cer­tainty aris­ing from Brexit and weak un­der­ly­ing busi­ness con­di­tions were all men­tioned by pan­el­lists as fac­tors ham­per­ing per­for­mance in De­cem­ber.”

RBS chief economist Se­bas­tian Burnside said: “Scot­land’s busi­nesses have shifted from be­ing the most op­ti­mistic in the UK a few months ago to amongst the most pes­simistic. So much so firms re­ported a mar­ginal fall in out­put in De­cem­ber. Ex­ports have strug­gled and this re­port shows a steady slow­ing in the pace of growth amongst Scot­land’s in­ter­na­tional trad­ing part­ners.”

Se­bas­tian Burnside

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