New business grows in May in Scotland
However, the increase in new work failed to lead to a rise in output, which remained broadly unchanged. Meanwhile, workforce numbers fell for the sixth successive month amid a further deterioration of outstanding business levels. Elsewhere, price pressures continued as both output charges and input costs rose.
The seasonally adjusted headline Bank of Scotland PMI - a single-figure measure of the month-on-month change in combined manufacturing and services output - fell fractionally to 49.9 in May after registering 50.0 in April.
The latest figure pointed to broadly stable output in Scotland’s private sector. For the second successive month, new business levels expanded in Scotland’s private sector.
The rate of growth accelerated to the joint-fastest since August last year, yet remained relatively marginal and weaker than the historical average. The latest increase was driven by Scotland’s manufacturers, who reported the sharpest rise in 21 months.
However, the expansion in new work was more muted amongst service providers. Workforce numbers at Scottish private sector firms continued to contract during May, extending the current sequence to six consecutive months.
The pace of job cutting was broadly similar in the manufacturing and service sectors, with a number of panellists linking the decline to the continued downturn in the oil & gas sector.
Price pressures continued to grow for Scottish private sector businesses during May. In addition, the increase in input costs was marked. According to anecdotal evidence, higher average cost burdens were linked to a rise in raw material prices, most notably for steel and oil.
Meanwhile, panellists recorded only a slight rise in their output prices, attributed to a combination of cost covering efforts and an increase in wages. ■