The latest data for the Bank of Scotland Purchasing Managers' Index (PMI) produced by Markit purports to show continuing growth of private sector business activity in Scotland during April. Growth was slightly stronger in Scotland in April than in the UK after being weaker in March. But growth weakened in April compared to March in both Scotland and UK - see chart:
Markit data show from their surveys that Scotland was the third fastest growing part of the UK in April after the West Midlands and London.
However, we should not get carried away. The PMI score has been above 50 for the past 16 months indicating continuing growth. The most recent UK and Scottish PMI data appear to conflict with the outturn GDP figures, with the ONS data suggesting a fall in GDP over the past 6 months. It may be that the ONS data will be revised upwards for the first quarter and many analysts believe that the ONS is underestimating UK growth - see here. Yet, others argue that negative construction growth and falling GDP is the inevitable outcome of the UK fiscal consolidation and large cutback in public investment, which, as Jonathan Portes points out, was down 25% in the UK last year.
At best the latest PMI data for private sector activity in Scotland show weak growth and a faltering recovery.
Fiscal consolidation continues to bite, the inflation rate is falling back more slowly than the Bank of England expected due to the effects of earlier rises in energy prices, and the Eurozone crisis is worsening again.
In these circumstances, it would be a brave person who saw much hope for future Scottish growth in the latest PMI data.
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