Activity in the private sector picked up last month as Scottish businesses bounced back from a “referendum-induced” low.
The Bank of Scotland’s monthly purchasing managers index report found that the slowdown in economic activity seen in September was reversed last month.
The bank’s headline PMI measure where anything above 50 represents growth rose to 54.2 from 51.5 in the period as a result of an increase in new orders for companies north of the border.
“The rate of expansion in new work was at a three-month high, bolstered by strong inflows at services firms,” the report states.
However, the survey found that new orders in the manufacturing sector fell during the month, with the rate of decline quickening from September as a result of increasing weakness in export sales.
BoS also said that the amount of backlogged work had decreased during October the sixth consecutive month in which the depletion trend had been seen.
“The rate at which backlogs were reduced was only modest, but nevertheless the fastest since March 2013,” the authors said.
“With firms generally able to keep atop of workloads, October saw a further easing in the rate of job creation to a 10-month low.
“A weaker increase in service sector employment underpinned the overall slowdown.”
Data on prices showed historically weak input cost inflation and only a marginal rise in output charges in the period.
The Bank of Scotland’s chief economist Donald MacRae said the pace of recovery had slowed in recent months.
“October’s PMI bounced back from September’s referendum induced low to reach 54.2,” Mr MacRae said.
“Both services and manufacturing sectors recorded growth with a welcome increase in the level of new business, particularly in financial services.
“But the level of new export orders at manufacturers fell for the fourth month in succession, illustrating the effect of the slowdown in the eurozone.
“The Scottish economic recovery continues but at a reduced rate compared to the first half of the year.”