The Scottish economy continued to improve in July, but this improvement did nothing to boost employment levels.
After five consecutive months of job creation, businesses north of the border reported that recruitment levels remained the same last month, compared with a slight increase across the UK as a whole.
Private sector companies continued to see an increase in new business albeit at a slower pace than in the previous 5 months.
The chief economist at the Bank of Scotland, Donald MacRae, said that this was the thirteenth consecutive increase in business activity. Manufacturing still led the recovery whilst growth in the service sector was moderate. There was an increase in new orders for the sixth consecutive month; however last month’s rise was weaker than in previous months.
The business and financial service sectors have shown welcome growth and tourism and travel continue to grow but at a slightly lower rate. MacRae concludes that the overall economic recovery news is positive, albeit slightly subdued.
However, there are fresh fears that Scotland may be about to suffer a surge in corporate failures. Figures from the Accountant in Bankruptcy showed that liquidations in Scotland rose by 103% in the 2nd quarter.
This was a rise of 8% over Q1. 572 companies in Scotland have gone into liquidation in the first six months, up by 265 on the first half of 2009.
Bryan Jackson from PKF business advisers and accountants warns that public sector spending cuts could lead to more corporate failures.
The largest rate of failures in Q2 were in the property and business activities sector, followed by the construction industry.
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