Scots private sector expands again as services soar

The headline Scotland Business Activity Index – the index that measures the month-on-month change in the combined output of Scotland’s manufacturing and service sectors – has signalled a third consecutive monthly expansion in private sector output during March.

Private sector growth in Scotland remains skewed towards the service sector, according to the latest Royal Bank of Scotland-S&P Purchasing Managers’ Index (PMI).

The index rose from 52.1 in February to 53.6, indicating the most pronounced expansion in 11 months.

The latest upturn across Scotland surpassed that seen for the UK as a whole.

While business activity rose across service providers at the sharpest pace since June 2022, the downturn in manufacturing production entered its ninth successive month and deepened since February.

Scotland’s private sector signalled a second consecutive monthly rise in new business during March. This was again driven by service firms, while the downturn in manufacturing new orders entered its 12th successive month.

The latest data indicated a further improvement in confidence levels at Scottish private sector companies. The respective index ticked up for the second straight month to a 13-month high.

The positive year-ahead outlook was spurred by plans of increased investment and advertising, as well as hopes of improving underlying demand conditions.

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, said: “The health of the Scottish private sector continued to improve as the first quarter drew to a close.

“However, the growth recorded was solely garnered on the back of the fast-expanding service sector. Meanwhile, the production segment of the economy remained a challenge.

“The lopsided nature of the expansion injects some concern over future growth. Divergent trends were also seen in terms of employment, which increased in services but decreased solidly across manufacturing.”