‘Unchanged private sector output suggests stability’, says BoS

The single-figure measure of the month-on-month change in combined manufacturing and services output - rose to 50.0 in April from 48.5 in March. The latest reading ends two months of contraction.

Similarly, new business intakes received by Scotland’s private sector stabilised during April.

While there was a slight increase in volumes of new work received by service providers, manufacturers reported a contraction in new orders for the eighth consecutive month.

Outstanding business volumes fell further, signalling ongoing spare capacity in Scotland’s private sector during April. Levels of incomplete work have deteriorated in each of the past 16 surveys. The rate of decline was the softest for three months, although still remained solid overall.

Job losses continued for the fifth successive month, with the latest decline the largest since November 2010. This was broad-based across both goods producers and service sector companies, with several firms partly linking the fall to the downturn in the oil and gas industry.

For the first time in nine months, firms raised their output charges. According to anecdotal evidence, the rise was linked to efforts to match competitors’ prices. An increase in average tariffs in the service sector was partly offset by discounting by Scotland’s manufacturers.

Meanwhile, input price inflation was the sharpest for 26 months. Scotland’s private sector firms have reported a rise in average cost burdens in the past three surveys, with panellists associating the latest increase with higher average salaries.

Alasdair Gardner, Bank of Scotland regional managing director, Scotland - Commercial Banking, said: “Stabilising business conditions were the theme of April’s survey data, which is encouraging news for Scotland’s private sector after an intensifying downturn over the previous few months. However, firms still reported declines in their backlogs of work levels and employee numbers, suggesting that the economy could be poised to return into contraction territory in the near future.”