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Private sector output in Scotland increases at marginal rate in January

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Staff Writer | February 13, 2018
Activity in the Scottish private sector returned to expansionary territory in January, following a contraction at the end of 2017.
Private sector Scotland
Scotland   Bank of Scotland PMI
Broad-based expansions were observed in both employment and new orders.

Meanwhile, private sector business optimism strengthened markedly to a 43-month high.

The seasonally adjusted headline Bank of Scotland PMI - a single-figure measure of the month-onmonth change in combined manufacturing and services output - registered at 50.3 in January, from 49.4 in December.

Although the pace of output growth signalled was only marginal, it represented an improvement from the mild decline observed in December.

Scottish private sector firms reduced activity fractionally.

That said, the pace of contraction weakened and was marginal.

Meanwhile, order book volumes expanded across the Scottish private sector in January.

New business inflows rose markedly in the manufacturing sector, supported by new customer wins and renewed export growth.

In the service sector, panellists reported that successful tendering had contributed to higher order intakes.

Greater staff levels enabled Scottish private sector firms to clear outstanding business.

Backlogs of work were reduced in January, albeit to the softest extent since September last year.

Firms took advantage of stronger demand and raised output prices in January.

In fact, selling charges were increased to the sharpest extent in five months.

That said, input cost inflation outstripped that of output prices to a marked degree, thereby signalling a squeeze to private sector profit margins.

Cost pressures intensified in January to a nine-month high.

Lastly, fresh expansions in new business and output coincided with greater private sector business confidence during January.

Moreover, the degree of optimism strengthened to a 43-month high.