Scots private sector output and employment rise again

Judith Cruickshank of RBS

The headline Royal Bank of Scotland Business Activity Index rose from 53.6 in March to 53.8 in April, signalling the sharpest rise in Scottish private sector output since April 2023.

Private sector companies across Scotland continued to raise their staffing levels in April, with expansions now noted for the 15th straight month.

Moreover, the rate of job creation quickened from March’s six-month low and was solid overall. Again, job creation was centred at service firms, although the downturn across manufacturers moved closer to stabilisation.

Of the 12 monitored UK areas, Scotland recorded the second-strongest rise in workforce numbers.

Again, the upturn in output was heavily reliant on the service sector, where a strong expansion in activity helped offset a steeper decline at manufacturers.

In fact, the divergence between the two sectors in Scotland was among the largest recorded in over 26 years of data collection.

The index is a seasonally adjusted index that measures the month-on-month change in the combined output of Scotland’s manufacturing and service sectors.

The trend in output reflected underlying demand conditions. Manufacturers posted another drop in new orders, while services firms reported a further rise in inflows of new work.

Overall, a third consecutive monthly rise in new business was recorded across Scottish private sector firms in April.

New contract wins and increased investment were said to have driven sales.

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, said: “Scottish private sector companies signalled a solid start to the second quarter, with expansions now noted in each month of 2024.

“Activity rose at a quicker pace as growth in new business was sustained. However, as has been the case since the current expansion in activity began, growth was limited to service providers, while the manufacturing sector remained in contraction territory.

“Moreover, inflationary pressures also quickened notably, with service firms being the main reason behind the stickiness in prices and charges.”