Sharp drop in Scottish manufacturing output

A downturn in manufacturing cancelled out growth in the service sector

Manufacturing firms in Scotland suffered a sharp drop in output last month, and a steeper decline in new orders, according to new figures.

The latest Royal Bank of Scotland (RBS) PMI report found business activity unchanged in September, following three months of growth.

A downturn in manufacturing cancelled out growth in the service sector.

Firms across the private sector continued to cut staff numbers last month.

This marked the third consecutive month of falling employment.

'Political uncertainty'

The rate of cuts was the fastest in more than three years, with the report stating that respondents linked the latest decline to "uncertainty and shortages of candidates".

Responses indicated the quickest fall in new orders since March.

The report said: "Anecdotal evidence linked falls in new business and activity to continued economic and political uncertainty.

"Despite improving from August, business confidence in September was the second-lowest since July 2016 - the month following the EU referendum."

The seasonally adjusted headline RBS Activity Index - a measure of combined manufacturing and service sector output - dropped from 50.3 in August to 50.0 in September, signalling a stagnation of private sector business activity.