Scots manufacturing output returns to growth

The Scottish economy remained stuck in a downturn during February, according to the latest Royal Bank of Scotland Purchasing Managers’ Index (PMI) report.

“At the sector level, the downturn was centred on services, which saw a further marked drop in activity, while manufacturing output returned to growth,” said the report.

The seasonally adjusted headline Royal Bank of Scotland Business Activity Index — a measure of combined manufacturing and service sector output — remaining well below the 50.0 mark.

Rising from 33.3 in January to 44.1 in February, the latest figure pointed to a slower pace of reduction, but one that was still sharp overall.

“Meanwhile, inflows of new business declined further, amid reports that ongoing coronavirus disease 2019 (COVID-19) measures had stymied client demand,” said the report.

“Positively, sentiment towards activity over the coming 12-months was the strongest on record, with hopes of looser restrictions and an economic recovery driving optimism.

“A sixth straight monthly reduction in the level of new business at Scottish private sector firms was recorded in February.

“Panellists linked the latest fall almost exclusively to lockdown restrictions.

“The rate of decline eased on the month, but was still sharp and much quicker than that at the UK level.

“Scottish services firms registered a much faster decrease in new work than manufacturers.

Private sector firms in Scotland recorded improved confidence with regards to the year ahead outlook for activity in February.

“In fact, the level of positive sentiment was the highest on record (since 2012).

“Confidence was attributed by respondents to hopes of a timely end to COVID-19 restrictions and a subsequent economic recovery.

“Scottish private sector employment declined for the thirteenth straight month during February …”