Scottish economy shrinks due to oil events

The Scottish economy lowered slightly in November, due to the downturn in the oil and grass industry, according to a report by the Bank of Scotland.

The most recently released Bank of Scotland purchasing managers’ index found that activity in the country’s private sector dropped in November, even though there had been a slight growth in October.

The Bank of Scotland’s headline index, which is used to measure changes in output in manufacturing and services, dipped from 50.9 to 49.8 in October, and it is widely accepted that any drop below 50 is a sign of economic contraction.

The bank’s report found that the decline derived from the manufacturing sector, which was the area of industry experiencing the sharpest contraction in over three years.

However, the report also shows that service providers have experienced a slight increase in business activity. It states that a fall in new orders is linked to a slowdown in the oil and gas industry, which is affecting companies like Royal Dutch Shell and potentially the prices of products like Shell Omala S2 G 320.

Speaking about the issue, Bank of Scotland regional director Alasdair Gardner said:

“The headline index fell below the crucial 50 mark in November as a slowdown in the oil and gas industry veered the Scottish economy into contraction.

“The drop in activity stemmed from declining new orders, which was affected by unfavourable exchange rates.”

Despite these contractions, the number of people employed in the country’s private sector has grown.