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Key indicator shows signs of further boost to economic recovery

Category: Scottish Economy — Mark on August 28, 2013

The Purchasing Managers Index (PMI) for July has shown that firms in Scotland are taking on more and more new orders.

The PMI is felt to be one of the strongest indicators of economic health.

The data also showed that bosses were looking to take on new staff – largely in response to a backlog of orders – and comes on the back of other strong reports for the UK economy as a whole.

The fact that managers are looking to expand their recruitment is expected to be looked on favourably. Recruitment is one of the first areas to suffer when there is downturn.

With many firms looking to such facilities as invoice factoring to shore up their finances though, stability and health have returned.

According to Donald MacRae, an economist for the Bank of Scotland who produces the PMI for the country, the level of confidence in businesses is clearly increasing.

MacRae said:

β€œThe recovery will become even more embedded if firms build on this ten-month run of positive PMIs by increasing investment.”

The PMI records contract winning activity by pointing it. Anything above 50 shows there is increased activity. The Scottish PMI for the last month recorded a points tally of 56.7.

This was slightly down from the previous month. However, June’s total of 57 points was the highest level reached in over six years.

Manufacturing and services all experienced good levels of growth in Scotland for the month.

Exports too were strong. However, there was a word of warning from Holyrood, which said that continued weak growth in Europe could start to detrimentally affect this.

'Disclaimer: The information contained in these articles is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.

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