Scottish private sector growth resumes

The Scottish private sector registered the first rise in private sector activity for seven months in February, according to the latest Royal Bank of Scotland Purchasing Managers’ Index (PMI) report.

The pace of job creation across Scotland was faster than the UK-wide average, which also recorded a rise in employment for the first time in three months.

“The Business Activity Index – a measure of combined manufacturing and service sector output – moved back within in the expansion territory, printing 51.0, up from 47.1 in January, as growth resumed across both the manufacturing and service sectors, with the former leading the expansion,” said the report.

“Panel members reported an improvement in demand conditions and growth in new clients helped boost activity.

“New orders also rose, following seven consecutive months of decline.

“The upturn in new orders helped with the first rise in workforce numbers in three months.

“Furthermore, despite remaining stubbornly high, cost pressures continued to diminish. All in all, the positive performance of the Scottish private sector fed into higher levels of confidence.

“Inflows of new business rose across Scotland in February, ending a seven- month period of decline.

“Upturns were similar across the two sub-sectors. Panel members noted growth in sales and new projects and clients helped revive growth.”

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, said: “Private sector output registered growth mid-way through the first quarter of 2023.

“The headline index signalled a mild expansion in output and marked the first month of increase since July 2022. Firms reported that a revival in customer demand and growth in new clients helped boost sales and activity.

“Growth in business requirements resulted in higher intakes of staff across both goods producers and service providers, while backlogs fell for the ninth month running.

“Furthermore, with inflationary pressures continuing to cool off, the Scottish private sector reported a modest performance overall, a change from the contractions seen since last August.

“Additionally, with confidence strengthening to an 11-month high, we hope that the upturn across Scotland will continue in the coming months.”