Scots private sector expansion quickens in June

The Scottish private sector indicated a “solid and quicker expansion” in activity during June, according to the latest Royal Bank of Scotland PMI data report.

The upturn was mainly driven by services firms.

Private sector companies across Scotland also registered a fifth successive monthly rise in employment during June.

At 53.2 in June, up from 50.7 in May, the seasonally adjusted Scotland Composite Output Index extended the current run of increases to five successive months and at a rate which was above the long-run survey average.

“The upturn across Scotland also surpassed that seen at the UK level, placing third in the UK regional rankings table behind London and the South East,” said the report.

“Moreover, growth of new business also quickened during the month. The upturn was mainly driven by services firms.

“Turning to prices, despite remaining historically sharp, inflationary pressures showed further signs of easing from the highs seen in the previous two years.

“Scotland’s private sector signalled a fifth monthly rise in new business during June. The rate of expansion quickened mainly due to a faster increase at services providers.

“Panellists noted that greater demand and a general market improvement helped drive the upturn. Meanwhile, manufacturing new orders fell at a slower rate.

“Scotland recorded the second fastest expansion in new work among the 12 UK areas, behind London.”

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, said: “The Scottish private sector signalled a stronger performance midway through the year.

“The upturn was largely supported by a quicker expansion across the services sector, while manufacturing continued to exhibit weakness despite registering a slight increase in production.

“The diverging trends between the two sectors are a concern as dependence on services grows. This is highlighted by a quicker expansion in new business at services firms, while manufacturers signalled a third monthly contraction in factory orders.

“New orders also give an indication of business activity in the coming months, and the data from June signals growth will remain skewed towards services.

“Furthermore, outlook expectations across the two sectors also showed more subdued sentiment across manufacturers, while service providers remained upbeat in comparison.

“In terms of prices, inflationary pressures eased in June, with cost burdens rising at the softest rate since May 2021. Panellists largely attributed the upturn in overall cost burdens to increasing labour costs.”