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Scottish business activity continues to fall in November

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Scottish business activity continues to fall in November

The latest Royal Bank of Scotland PMI figures have signalled a solid reduction in Scottish private sector activity in November.

At 47.1, up from 46.5 in October, the Scotland Business Activity Index posted below the crucial 50 mark for the third month running.




The decline in private sector activity reflected an accelerated fall in manufacturing output and a weaker reduction in services activity. The downturn in output was propelled by a stronger reduction in new orders, as underlying demand conditions worsened.

Nonetheless, firms continued to increase their workforce numbers in November and at the strongest pace in six months. This in turn led them to further reduce backlogs.

Inflows of new business fell solidly across Scotland in November, thereby extending the current run of decrease to five months. Survey panellists reported that waning demand and an uncertain economic environment weighed down on sales, especially across the manufacturing sector.

Scottish private sector firms generally anticipated growth in business activity over the coming 12 months, citing increased marketing plans and hopes of stronger demand, as well as stable interest rates and lower inflation. That said, confidence remained historically muted and much weaker than the UK-wide average.

Despite shortfalls in demand, Scottish firms remained keen to raise their workforce numbers in November, with expansions noted in each of the past 10 months. In fact, the rate of job creation quickened to a six-month high, with successful replacement of leavers, expansion plans and expectations of growth in new orders underpinning the latest uptick.

Scotland also recorded the strongest rise in employment of all the 12 monitored UK regions and nations.

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