The latest Royal Bank of Scotland PMI report has revealed that Scottish firms continued to increase their workforce numbers in November — and at the strongest pace in six months.
Scotland recorded the strongest rise in employment of all the 12 monitored UK regions and nations.
Employment levels expanded for the 10th month running in November and growth in Scottish payroll numbers was noted across both the manufacturing and services sectors.
Scottish private sector firms also said they generally anticipate growth in business activity over the coming 12 months.
“Moreover, sentiment improved to a five-month high,” said the report.
“Firms cited increased marketing plans and hopes of stronger demand, as well as stable interest rates and lower inflation.
“Despite shortfalls in demand, Scottish firms remained keen to raise their workforce numbers in November, with expansions noted in each of the past ten months.
“In fact, the rate of job creation quickened to a six-month high and was robust by historical standards.
“Successful replacement of leavers, expansion plans and expectations of growth in new orders were said to have underpinned the latest uptick.
“Moreover, Scotland recorded the strongest rise in employment of all the 12 monitored UK regions and nations.”
The good news on jobs came despite the report showing a solid reduction in Scottish private sector activity in November.
“At 47.1, up from 46.5 in October, the Scotland Business Activity Index posted below the crucial 50.0 mark for the third month running,” said the report.
“The decline in private sector activity reflected a sharp and accelerated fall in manufacturing output and a weaker reduction in services activity.
“The downturn in output was propelled by a stronger reduction in new orders, as underlying demand conditions worsened …
“Inflows of new business fell solidly across Scotland in November, thereby extending the current run of decrease to five months.
“The rate of contraction quickened from October to the strongest in the aforementioned sequence.
“Panellists reported that waning demand and an uncertain economic environment weighed down on sales, especially across the manufacturing sector …”
Scottish private sector companies recorded a sharp rise in selling prices during November.
While the rate of output charge inflation was the softest in three months, it remained historically strong.
Firms raised their charges to cover the effects of inflation on their cost burdens.
Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, said: “Businesses across Scotland struggled to raise their activity as waning demand and growing market uncertainty hampered sales in November.
“Moreover, with expectations remaining historically muted, the downturn could continue into the new year.
“However, despite the setbacks private sector companies are facing, the labour market remains resilient.
“Employment levels expanded for the tenth month running in November.
“Moreover, growth in payroll numbers was noted across both the manufacturing and services sectors.”