Biggest fall in private sector activity in 11 months
Private sector activity in October fell for a second month with manufacturing and services falling at the sharpest rate since last November, according to the latest Royal Bank of Scotland data.
Worsening underlying demand conditions and the cost-of-living crisis were said to have contributed towards the latest fall in output.
Additionally, the downturn across Scotland was more pronounced than that recorded for the UK as a whole.
Despite souring business conditions, Scottish private sector firms increased their workforce numbers in October. The rate of job creation was the fastest in five months and the quickest seen of all the UK nations and regions.
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.
Brexit, the ongoing war in Ukraine, rising energy prices and the current slowdown in the economy all heavily weighed on expectations.
Of the 12 monitored regions and nations, only Northern Ireland and the North East recorded a weaker outlook than Scotland.
Despite deteriorating business conditions, employment growth remained resilient across Scotland, thereby extending the current run of expansion to nine successive months. Moreover, the rate of job creation quickened to a five-month high.
Judith Cruickshank, chairman of the Scotland board at Royal Bank of Scotland, said: “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.”