THE lowering of the legal drink-drive limit in Scotland continues to hit business in the hospitality sector.
The Bank of Scotland said restaurants and bars were seeing “a changing pattern of spending” because of the new law, which came into force in December.
The new legislation on drink-driving reduced the legal alcohol limit from 80mg to 50mg in every 100ml of blood.
The economic picture in the hospitality sector was revealed in the bank’s latest survey of Scottish purchasing managers.
Bank of Scotland chief economist Donald MacRae says the lower alcohol limit, enforced north of the Border since December, has stunted the pub industry’s growth.
It comes after landlords reported a slump in takings from food and alcohol after the laws were first introduced.
Publicans fear the law change will lead to more closures than the smoking ban, which was introduced nine years ago.
The banks’ Purchasing Manager’s Index report indicated a slight fall in overall service sector activity last month.
Mr MacRae said: “Manufacturing exporters have been affected by the falling euro while services businesses in hospitality are seeing a changing pattern of spending resulting from the lowered alcohol limit while driving.
“All are affected by subdued business confidence associated with the fall in the price of oil and the bad winter weather.
“But recovery is on the way with levels of new business increasing, employment rising in all sectors and the oil price up 20 per cent from January’s low.”
In February, purchasing consortium Beacon published a survey of hospitality sector customers that suggested Scottish businesses saw bar sales drop by up to 60 per cent in the two months after the introduction of the new limit.
In contrast, there was a modest increase in new business for Scottish firms, with companies reporting “some dissipation of the uncertainty that has plagued client decision-making since the start of the year”.
The Bank of Scotland PMI – which measures changes in manufacturing and services activity – registered 49.4 during March – down from 50.2 in the previous month. Any figure below 50 suggests economic contraction.
It is the second time in the past three months that a fall in output has been recorded, although the latest decline was marginal.
Manufacturers, while signalling a fractional increase in output, recorded a fall in new orders for a third month in succession. Survey respondents suggested the drop reflected subdued demand from the oil and gas industry.
In contrast, service providers recorded modest growth as economic conditions improved.
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