Bank: Private sector growth slows

Jun 11 2012

Growth in the private sector lost momentum in May, while employment remained unchanged, according to new data.

The Bank of Scotland Purchase Managers Index (PMI) showed that output levels and new business rose marginally, while employment was unchanged following increases in the previous three months.

Highlighting a slowdown in the rate of growth of Scottish private sector activity, the bank's PMI - which monitors activity across Scotland's manufacturing and service industries - fell from a score of 53.5 in April to 50.8 in May.

Overall, new work given to firms north of the border rose only marginally, and at a comparatively slower rate than across the UK as a whole.

Donald MacRae, chief economist at Bank of Scotland, said: "Growth in the private sector of the Scottish economy slowed sharply in May but remained positive.

"In contrast, manufacturing returned to modest growth in the month with new export orders increasing for the third month in a row.

"All businesses will benefit from the reduction in input cost inflation. Weakness in the domestic economy is being offset by export demand but it is insufficient to generate a more robust recovery. The Scottish economy is struggling to maintain growth momentum in the face of the global slowdown."