Scots private sector has fastest expansion in UK

Edinburgh's Princes Street

Scotland’s private sector recorded further rapid growth midway through the third quarter, according to the latest Royal Bank of Scotland PMI from IHS Markit.

Scotland registered the fastest expansion in output across the 12 monitored UK areas in August.

As a result, companies continued to take on additional staff for the fifth month running, with the rate of job creation remaining sharp despite easing.

Inflationary pressures were again severe, however, as costs rose at one of the steepest rates on record amid reports of higher material, fuel, transport and wage costs, with manufacturers particularly hard hit.

The seasonally adjusted headline Royal Bank of Scotland Business Activity Index — a measure of combined manufacturing and service sector output — rose from 57.5 in July to 58.1 in August, signalling a steep rise in activity amid a further sharp increase in new work.

A fifth successive monthly rise in workforce numbers at Scottish private sector firms was recorded in August, amid reports that companies were expanding their staffing levels to keep up with demand.

Across the monitored sectors, services firms recorded a quicker upturn in employment for the fourth month running.

August data highlighted further signs of capacity pressures at Scottish private sector firms, as the level of outstanding business increased again.

Malcolm Buchanan, chair, Scotland Board, Royal Bank of Scotland, said: “August data pointed to a further rapid expansion of Scotland’s private sector economy, with the rate of growth re-accelerating from July and outpacing the UK as a whole by a wide margin.

“Services continued to record a faster upturn than manufacturing, although the differential narrowed slightly.

“Inflows of new work increased sharply again, as looser lockdown measures continued to boost client demand and, as a result, firms took on staff for the fifth month running.

“Overall, the latest PMI data signals another strong performance for the Scottish private sector.

“Inflationary pressures remain a concern, but do not seem to be hindering the economic rebound as growth remains close to the survey record pace seen in May.”

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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.