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Report shows slight weakening in private-sector activity

Business activity in Scotland's private sector weakened slightly last month, a new report shows.

Firms reported the first contraction in output for three months, with reduced demand giving the services sector, in particular, a knock.

Across the private sector, new order levels lowered and the first reduction in workforce numbers since June was detected.

The figures were contained in the Bank of Scotland's purchasing managers' index (PMI) for November.

The index, which produces a single-figure measure of the month-on-month change in combined manufacturing and services output, slipped from 50.6 in October to 49.4 last month.

The marginal contraction was the first reported since August.

Service providers recorded a moderate decline in business activity during the month, although production growth was recorded in the manufacturing sector.

The rate of job-cutting was described as "slight" but cost pressures on firms were said to remain marked.

Nick Laird, regional managing director for Bank of Scotland commercial banking, said: "Business activity across the Scottish private sector weakened marginally in November as reduced demand impacted the services sector in particular.

"November also saw new order intakes and backlogs of work deteriorate for the 23rd successive month.

"With job cuts evident for the first time since June and input costs such as fuel prices, higher wages and foreign exchange rates increasing, companies will be looking for a pick-up in new business in the new year to help rejuvenate the sector."

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