The rate of contraction of Scotland’s jobs market eased in December, according tothe Bank of Scotland’s latest PMI report.

The report posted a reading of 53.7 in December, up from 50.6 in the previous month for manufacturing, while the services sector posted a reading of 47.1 in the month, up from 46.9 in November.

Meanwhile, the headline Bank of Scotland PMI – a seasonally adjusted index monitoring activity across Scotland’s manufacturing and service industries – signalled a contraction of Scotland’s private sector economy in the final month of 2010, fell almost 10 points to 39.6 from 49.5 in November.

Donald MacRae, chief economist at Bank of Scotland, says: “December was a difficult month signalling a weak last quarter of 2010 for the Scottish economy. However, there were encouraging signs of continuing robust export demand.

“Harsh weather hit the Scottish economy in December, resulting in a 22-month low for the PMI output index. Services performance was hit particularly hard leading to a trimming of the workforce.

“On a more positive note, manufacturers reported growth of export business and continued to hire in December. Employment growth in the manufacturing sector picked up to a four-month high as extra staff were required to help reduce backlogs and in anticipation of improved demand in 2011.”