Scottish businesses hiring more staff, says survey

The survey suggests both manufacturers and service providers are taking on more staff

Scottish firms took on staff last month at the fastest rate for more than three years, a survey has suggested.

The Bank of Scotland's purchasing managers index (PMI) said firms hired more staff, despite seeing only a marginal increase in new business.

The PMI also indicated the Scottish private sector economy continued to grow in May, albeit at a reduced rate.

The rise compared favourably with Wales and Northern Ireland, but was weaker than growth seen in most of England.

The survey reported activity across Scotland's manufacturing and services sectors rose for the fifth successive month, although output growth moderated as a result of a much weaker rise in new business levels.

Latest data signalled only marginal gains in new contracts in both manufacturing and services.

Input prices continued to rise sharply - more so in manufacturing than services - even though the overall rate of inflation slowed to a five-month low.

Input cost inflation also remained greater than the UK-wide average.

Donald MacRae, chief economist at Bank of Scotland, said: "Both manufacturers and service providers are taking on more staff with the fastest rate of job creation since February 2008.

"New business inflows have increased every month of 2011 so far.

"However the incoming new business index fell sharply during the latest period, to a level indicative of only a marginal rate of expansion."