The pace of growth in the Scottish private sector economy in October showed further slowdown, according to data from the latest Bank of Scotland PMI (Purchasing Managers’ Index).

This reflected a second successive drop in new business, with firms working through backlogs of work to sustain output growth. Businesses continued to cut staff numbers overall, while shouldering the burden of ever-steeper cost inflation by freezing tariffs.

The seasonally adjusted index, monitoring activity across Scotland’s manufacturing and service industries, read 51.0, down from 51.9 in September, and signalled a modest month-on-month increase in activity.

New business received fell for a second consecutive month in October, with a marked fall in the demand for manufactured goods underlying the latest decline. Service providers, meanwhile, saw a modest pick-up in new business following September’s contraction.

In contrast to the trends shown for new work, Scottish manufacturers registered a moderate rise in headcounts in October, while their service-providing counterparts cut jobs.

Employment within the Scottish private sector overall fell for a third month running, albeit at the lowest rate in this sequence.

Donald MacRae, chief economist at the Bank of Scotland, says: “The Scottish economy is showing resilience in the face of the global slowdown, but is struggling to maintain growth momentum.”