Manufacturers in Scotland suffered a seventh consecutive fall in output last month as business activity as a whole stagnated, according to a report out today.
However, firms are confident output will rise over the coming year with sentiment reaching a six-month high although expectations remain subdued compared to long-term trends.
The latest Royal Bank of Scotland (RBS) PMI report found that overall private sector activity was unchanged during December following growth in November.
In manufacturing, order book volumes fell at the sharpest rate since March 2009. Service providers registered a back-to-back rise in new business, although the rate of growth eased from November.
RBS’s seasonally adjusted headline Business Activity Index - a measure of combined manufacturing and service sector output - fell from 50.9 in November to 50.0 in December, to signal no change in Scottish private sector activity at the end of 2019.
Private sector firms in Scotland reported no change in workforce numbers during the latest survey period. Manufacturers recorded a sixth consecutive reduction in employment, whilst services firms registered a slight increase in staffing levels.
Malcolm Buchanan, chair of RBS’s Scotland board, said: “ Private sector activity in Scotland stagnated at the end of 2019, with the manufacturing downturn continuing for the seventh month running to cancel out marginal services growth.
“Weighing on activity was a renewed contraction in order book volumes, which fell mildly amid reports of weak demand conditions. Moreover, the reduction contrasted negatively with the trend across the UK as a whole, where overall new business rose slightly.
“Meanwhile, sentiment regarding activity over the next 12 months reached a six-month high, but expectations remained historically subdued with some firms noting persistent uncertainty is still clouding the outlook.”
