Brexit casts long shadow over strong showing

SOME of the findings of the latest survey of Scottish economic activity are more than a little bit encouraging.

In particular, the further acceleration of growth in output and new business in the private sector, revealed in Royal Bank of Scotland’s latest PMI (Purchasing Managers’ Index) report, are heartening.

The pace of increase of both output and new orders in Scotland is at its fastest in four years. What is more, output growth in Scotland last month was faster than that in the UK as a whole for the first time since July 2016, the month after the Brexit vote.

Royal Bank chief economist Sebastian Burnside notes, before July 2016, you have to go back to 2013 for the previous time growth of the Scottish private sector economy was faster than that Uk-wide in the PMI survey.

The latest survey indicates strength in Scotland’s business, professional and information technology services sub-sectors. It is also likely firmer global oil prices, which are enabling a recovery in the North Sea, are helping the broader Scottish economy. So far, so good.

Of course, the spectre of Brexit also looms large in the survey, as it does in so many economic and social contexts.

Royal Bank cites “concerns regarding the ongoing Brexit process” in the context of Scottish business confidence having fallen to a seven-month low in spite of growth being the fastest for four years.

As the clock ticks towards Brexit, it is not surprising companies are wary about the future, given the inevitable economic damage and mounting dangers of a Wile E Coyote-type, cliff-edge exit from the European Union.