Scottish private sector companies increased their workforce numbers in October.
The rate of job creation in Scotland was the fastest in five months and the quickest seen of all the UK nations and regions.
That’s despite the latest Royal Bank of Scotland PMI (purchasing managers index) report signalling a second monthly deterioration in private sector activity during October.
The headline Scotland Business Activity Index — a measure of combined manufacturing and service sector output — fell to 46.5 from 49.3 in September, indicating the sharpest decline since November last year.
“Despite deteriorating business conditions, employment growth remained resilient across Scotland, thereby extending the current run of expansion to nine successive months,” said the report.
“Moreover, the rate of job creation quickened to a five-month high. The uptick was spurred by stronger growth in services employment and a fresh rise in across manufacturers.
“Firms reported successful recruitment of suitably skilled staff and the replacement of voluntary leavers.
“Scotland registered the strongest job creation across all 12 monitored regions and nations.”
The report added: “A solid decline in new orders was reported across the Scottish private sector in October. The rate of contraction quickened from September and was broadly in line with the UK trend.
“A high interest rate environment and rising economic uncertainty were said to have contributed towards the downtick in sales.
“While the Future Activity Index posted above the neutral 50.0 mark to indicate confidence surrounding output expectations over the year-ahead across Scotland’s private sector in October, the degree of optimism remained historically subdued and even weakened fractionally since September.
“Brexit, the ongoing war in Ukraine, rising energy prices and the current slowdown in the economy all heavily weighed on expectations.”
Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, said: “With demand taking a step back over the last couple of months, the Scottish private sector displayed further weakness at the start of the final quarter.
“Spurred by sharper declines across both the manufacturing and services sector, business activity dropped at an accelerated pace in October.
“The downturn was the most pronounced in 11 months. Nonetheless, waning demand helped to assuage inflationary pressures, which were much weaker than this time last year.
“That said, rising costs for raw materials and renewed pressure from rising global prices meant that cost burdens, and in turn selling prices, still rose at historically elevated rates.
“However, employment trends remained resilient, with workforce numbers rising at the quickest pace in five months.”