Page last updated at 08:21 GMT, Monday, 8 February 2010

'Setback' for Scottish economic recovery

Economic figures
The Scottish figures saw staffing cut for the first time in four months

The economic recovery in Scotland took a knock in January, according to the latest business survey.

The Purchasing Managers Index showed bad weather was one of the reasons for a significant setback.

The survey, by economics consultancy Markit, showed growth came close to stalling in January, having risen strongly since June last year.

And while the weather was one factor, it did not harm continued robust growth across the rest of the UK.

Orders were postponed, according to the survey's feedback. The backlog of work continued its fall over recent months.

January saw staffing levels cut back for the first time in four months.

And while costs to businesses were rising, including fuel and commodities, in turn, the pressure to keep output prices low meant profits were being squeezed.

Markit economist Andrew Self said: "The Scottish economic recovery faced substantial headwinds during the first month of 2010, as heavy snow and sub-zero temperatures restricted activity.

"Highlighting the continued weakness of the recovery, new business fell for the first time in four months.

"While the weather in Scotland was particularly severe, it is concerning to see output growth stagnate, in stark contrast to the UK as a whole, where growth remained robust. The profits of Scottish firms continued to be squeezed in January, as input costs rose sharply."

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