By Russell Bruce
Scotland is continuing to see modest but constant economic growth over the last five months and has, albeit marginally, outperformed the UK as a whole in 4 out of the last 6 months according to the latest Purchasing Managers Index report from the Bank of Scotland.
Scottish businesses reporting new growth has also been more positive over the last 4 months compared to the UK, Scotland having recovered from a weaker position last September and October.
On employment Scottish businesses have seen a steady but small improvement between last September and February this year. Following 4 months of marginally negative employment reports the UK has now also moved over the 50 score barrier.
The scores in PMI reports are calculated from businesses reporting changes from the previous month. No change gets a score of 50. A performance decline will result in a score below 50 and an improvement over the previous month gives a score above 50.
Given international growth prospects and a weak UK domestic economy, the steadier pace in the Scottish reports over the last 6 months compared to the more erratic UK results, as the diagram illustrates, is quietly reassuring.
Commenting on the report, Donald MacRae, Chief Economist at Bank of Scotland, said, “February’s PMI rose to an eight-month high signalling continuing improvement in output and business activity during the month. The manufacturing sector recorded a modest rise in employment while services maintained job numbers. The increase in new orders both in the domestic economy and for exports is particularly welcome. These results provide further evidence that the Scottish economy is avoiding a ‘triple dip’ and has started 2013 in growth mode.”
A Scottish government spokesman said: “We are supporting growth by investing in jobs, training and ensuring we have the most competitive business environment anywhere in the UK.
“Our budget includes a tax relief package for business worth over £540m this year and we are bringing forward a further £385m package of economic stimulus to support jobs across the country.
“The Scottish Government is taking action where we can, and we are seeing results, but there is so much more that we could be doing with the full economic and fiscal powers of independence to strengthen our economy and create jobs.”