Output down as economic slowdown 'takes further hold'

Output from Scotland's manufacturing and service sectors fell for the first time in six months during September, according to a new report.

The Bank of Scotland found the amount of new business fell "at a marginal pace", while backlogs of work also declined.

New export orders also fell for the eighth month in a row.

However, the bank's latest PMI report suggested workforce numbers expanded "at an accelerated rate".

Bank of Scotland chief economist Donald MacRae said a slowdown in the Scottish economy, which had been identified in the summer, had "taken further hold".

Its PMI - which measures changes in manufacturing and services activity - fell from 50.8 in August to 49.

Any figure below 50 suggests economic contraction.

New orders

Last month manufacturing firms in Scotland reported a fall in new orders, from both the domestic and foreign markets.

The report also suggested the rate at which new business contracted was "sharp and led to a deterioration in production in the sector".

Data collected from Scottish service sector companies also highlighted a contraction in activity during the month.

This was despite a rise in incoming new business, which increased at the least marked rate in seven months.

However, the latest survey data indicated a modest expansion in headcount numbers at Scottish private sector firms.

Growth was led by the service sector, while manufacturing companies registered a more modest rise in employment.

While service sector companies reported higher input costs, manufacturing firms faced sharp reductions in prices - softening the overall rise in input prices.

Meanwhile, output prices fell again during the month.

'Broad-based decline'

Bank of Scotland chief economist Donald MacRae said: "September's PMI showed a broad-based decline in economic activity across both service and manufacturing sectors.

"The slowdown in the Scottish economy identified in summer has taken further hold in the month of September but employment intentions suggest a return to moderate growth in coming months."

Last week, national statistics released by the Scottish government found economic growth slowed in the second quarter of this year despite a strong performance by the construction sector.

Total output in the economy grew by 0.1% between April and June, compared with 0.4% in the previous quarter.

The UK economy as a whole expanded by 0.7% in the second quarter.