Scots growth hit ‘unprecedented’ levels in May

The latest IHS Markit-Royal Bank of Scotland Purchasing Managers’ Index (PMI) report shows that the easing of Covid-19 restrictions led to a ramping up of output in the Scottish private sector during May.

The seasonally adjusted headline Royal Bank of Scotland Business Activity Index — a measure of combined manufacturing and service sector output — posted 61.5 in May, up from 55.4 in April and signalling a substantial monthly increase in activity.

The rate of growth was the steepest since the survey began in January 1998.

Sharp expansions were recorded across both the manufacturing and service sectors.

Respondents mainly linked higher activity to the loosening of lockdown restrictions, with new business also increasing at an unprecedented pace.

“In response to higher workloads, companies scaled up employment to an extent previously unseen in the survey’s history,” said the report.

“Inflationary pressures strengthened, with both input costs and output prices rising at sharper rates.

“The easing of COVID-19 lockdown restrictions and associated improvements in customer demand and confidence supported a sharp and accelerated increase in new orders in Scotland during May.

“Moreover, the rate of growth surged to the strongest since the series began in January 1998.

“Both the manufacturing and service sectors posted accelerated increases in new business, with manufacturers continuing to lead the expansion.

“Business confidence in Scotland also improved to a new record high midway through the second quarter of the year, with optimism signalled at manufacturers and service providers alike.

“The further easing of COVID-19 restrictions over the coming months was behind confidence in the year ahead outlook.”

Malcolm Buchanan, Chair, Scotland Board, Royal Bank of Scotland, said: “Growth in the Scottish private sector hit unprecedented levels in May amid a further loosening of lockdown restrictions and strong confidence in the year-ahead outlook.

“Business activity, new orders and employment all increased at the sharpest rates since the survey began in January 1998.

“Encouragingly, services employment rose for the first time in 16 months.

“The strong expansion in workloads was accompanied by an intensification of inflationary pressures, with sharper increases in both input costs and output prices. Inflation was particularly strong in the manufacturing sector amid soaring global commodity prices.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.