The Scottish private sector recovery slowed down last month according to June’s purchasing managers index from the Bank of Scotland. This development could affect umbrella company contractors operating in Scotland.
The index measures activity across the manufacturing and service sectors in Scotland and last month it fell to 52.9 from the May figure of 53. Employment growth and new orders also decelerated during the period.
The chief economist at the bank, Donald MacRae, remarked that although the recovery slowed last month, manufacturing output achieved its best ever rise offsetting the sluggish growth in the service sector.
Clients appear to be postponing new projects due to fears that the recovery will not be sustained and this view was most apparent in the services sector.
Recruitment continued to increase in Scotland last month for the fifth consecutive month, although at a lesser rate than in the previous months.
In some circles there are now worries that Scotland could suffer a ‘double-dip’ recession. Scotland depends more on public sector employment than the rest of the UK and with government spending cuts looming more jobs could be lost.
There are also concerns that growth in the private sector may not be quick enough to soak up the inevitable redundancies in the public sector.
Elsewhere in the UK the picture looks slightly better although the PMI dipped one point in June. The index published by Markit/CIPS dropped to 54.4m the lowest level since last August. This was also the third drop in the index in the last 4 months.
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