Scots private sector growth jumps in July

Business activity in the private sector during July rose at the strongest rate in four years, despite business confidence dipping.

The Royal Bank of Scotland purchasing managers’ index (PMI), which provides a snapshot of the private sector economy, showed private sector companies in Scotland increased output last month by the greatest extent since 2014.

Strong inflows of new work, together with significant increase in demand, boosted business activity and encouraged recruitment.

The index, where any figure over 50 denotes growth, hit 55.1 in July, compared with 54.5 in the previous month, outpacing the UK average. Scotland’s rate of job creation was also faster than the broader nationwide rate, dropping only slightly from a 52-month peak in June.

However, the rate of inflation eased to a 22-month low and was the second-weakest of the 12 monitored UK regions, while input costs increased. Business confidence also dropped to a seven-month low amid “concerns regarding the ongoing Brexit process”, despite the rise in activity.

Sebastian Burnside, chief economist at Royal Bank of Scotland, said: “The upturn in Scotland’s private sector gathered pace at the start of the third quarter, with output increasing at the strongest rate in four years.

“Business activity was supported by a marked strengthening of demand. With backlogs of work rising, this suggests there are sufficient workloads for output to continue rising across the near-term.” 0 Sebastian Burnside: data says the future is promising