Scots firms shedding more staff

A study of Scots firms found jobs are being shed at an accelerating rate

Scottish companies are shedding staff at an accelerating pace, according to a survey of purchasing managers.

The Scottish Purchasing Manager Index report by Markit, an economics research company, showed the 15th consecutive month of falling activity.

But it also showed the pace of decline at its slowest since April last year.

A UK-wide Markit survey has found two months of growing business activity, suggesting that Scotland is finding it tougher to get out of the recession.

Scottish manufacturers responding to the survey last month were finding market conditions tougher than those in the service sector, for whom the June figures suggested the return of growing activity.

The problems were at their worst for manufacturers trying to win new business, as well as contraction of production volumes and run-downs of backlogged orders.

Job losses remained widespread and they were picking up pace in the June survey, mainly due to lower workloads and cost cutting.

'Behind the UK'

The survey found that businesses were getting squeezed by rising input prices, including fuel and raw materials, while at the same time, tough market conditions were forcing them to lower their output pricing for the eighth consecutive month.

Commenting on the survey, Andrew Self, an economist at Markit, said: "Activity in Scotland fell at the weakest pace since recession took hold in April last year."

"However, Scotland continued to lag slightly behind the UK as a whole, which saw a second straight rise in overall output.

He added: "Scottish firms will nonetheless take heart from the increase in service sector output and tentative signs that the manufacturing downturn has passed its worst phase."