Economy 'Strong' In First Quarter

The economy ended the first three months of the year strongly, according to a survey of business in Scotland.

Improved conditions led companies to increase staff, the Bank of Scotland said in its monthly purchasing managers index (PMI) report. 

Donald MacRae, chief economist at the bank, said: "The March PMI signalled further strong growth of business activity across both manufacturing and service sectors. 

"Not only did the level of new orders increase but employment rose for the 16th month in a row, while cost pressures eased. 

"New export orders fell for the second consecutive month, illustrating the challenge of improving our trade performance. 

"The Scottish economy has added another month of expansion, further embedding the growing recovery.'' 

The index's quarterly average improved slightly from the final three months of last year, the report suggests. 

There was a "notable easing'' in the rate of cost inflation faced across the private sector to the slowest since September 2009. 

"Anecdotal evidence highlighted the impact of a dip in fuel prices and strong competition among suppliers,'' the report adds. 

Finance Secretary John Swinney said: "We warmly welcome these figures which indicate Scottish private sector activity expanded for the 18th consecutive month. Following the January and February PMI, which both reported growth in output, the March reading suggests that the first quarter of 2014 ended on a positive note. 

"Scotland's economy is continuing to make headway, but there is no room for complacency. 

"As Scotland's Future outlines, with the full fiscal and economic powers of independence, the Scottish Government could do so much more to strengthen our economy and create more jobs.'' 

Ivan McKee, a director of Business for Scotland and owner of manufacturing businesses, including a metal fabrication company in Dunfermline, said: "This is great news and demonstrates the continuing strength of Scotland's economy, which I believe would benefit even more from us being independent. 

"Since the launch of our manufacturing business in Scotland in 2011 we've witnessed year on year growth with orders and contracts from both north and south of the border. One of the more recent, for example, a contract from English Heritage to supply the carriages for the Stonehenge Visitor Centre. 

"I am in no doubt this increase in business will continue.''

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