Scotland business

PMI suggests slight upturn in Scottish business activity

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Scottish business activity has picked up slightly but still lags well behind England, according to a monthly survey of purchasing managers.

The Bank of Scotland PMI found that a sharp rise in goods production north of the border last month was offset by shrinking services output.

In England, activity grew at its fastest rate so far this year, helped by a strong increase in new orders.

The improvement was seen across all English regions.

The PMI for Scotland - which measures changes in combined manufacturing and services output - stood at 50.6 last month, up from March's four-month low of 50.1.

By comparison, England's business activity index rose to a four-month high of 57.1.

Any figure above 50 suggests expansion.

April saw job creation in Scotland reach an eight-month high, despite business confidence easing to its lowest in six months.

There was also a modest increase in new orders in both the service and manufacturing sectors, with the latter showing the more marked rate of growth.

Firms expanded their workforces to meet increased demand requirements, according to anecdotal evidence.

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Image caption Output shrank in the services sector last month, according to the survey

On the price front, input cost inflation accelerated and was steep overall, leading to a marked rise in charges.

Meanwhile, confidence about future growth prospects remained "strongly positive" in April. That said, expectations had eased from March.

Fraser Sime, from Bank of Scotland Commercial Banking, said April's PMI signalled "a tentative upturn" in Scottish private sector growth.

He added: "The latest survey's results were driven by a strong manufacturing sector, which moved up a gear in April.

"There was good news all round from steep production growth, to solid job creation and a further easing of cost pressures.

"Meanwhile, the service sector marred April's PMI score as business activity in the sector shrunk for the second month running.

"A faster rise in new orders bodes well, though continued growth in the second quarter remains heavily dependent on the relatively stronger manufacturing sector."

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