Page last updated at 19:38 GMT, Monday, 14 September 2009 20:38 UK

Business activity 'on the rise'

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The service sector was found to be performing better than manufacturing

Scottish businesses are heading back towards growth again, according to the latest survey of senior managers.

The Purchasing Managers Index showed activity in Scottish business rising for the second consecutive month.

However, it is not yet in growth, and the rise in activity was weaker than the previous survey, carried out by Markit Scotland during July.

August saw a modest rise in new business, much of it driven by discounted prices.

The survey - which tracks the state of orders, new custom, stocks and employment - found the service sector to be performing much better than manufacturing.

Slow recovery

Job losses continued for the 17th month in a row, but the reductions were at a weakening pace.

Andrew Self, an economist with Markit Scotland, said: "The Scottish private economy expanded for the second successive month during August, providing further evidence that the private sector economy is slowly pulling out of deep recession.

"However, the rate of output growth eased in July and continued to lag behind the UK as a whole, suggesting the road to recovery north of the border may not be as stable or direct as first hoped."

In other comparisons with Wales, Northern Ireland and the regions of England, Scotland did relatively well in the employment count, with the worst figures for job shedding in London and north east England.

Input prices rose at a relatively high rate in Scotland, beaten only by eastern England, while London and north east England saw input prices dropping. Affecting the service sector worse than manufacturing, the main factors behind the rise were oil prices and a weakening of sterling against the euro.

Northern Ireland was the only area within the UK to see a worsening in business activity in August.

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