Services power economic growth in April
Private sector activity rebounded last month, as services growth offset a decline in manufacturing output, according to the latest Royal Bank of Scotland research.
The bank’s seasonally adjusted purchasing managers’ index (PMI) increased to 51 in April, from 49.6 in March, signalling a return to expansion in private sector output.
However the lender c autioned that the rise was “solely driven” by a revival in the services sector on the back of improved demand.
In contrast, manufacturing production declined as order book volumes shrank, which RBS attributed to economic uncertainty and a sluggish global goods-producing market.
Both sectors were po sitive regarding future output, although the degree of optimism eased to its weak est since October 2016.
Malcolm Buchanan, chair of the bank’s Scotland board, said: “At first glance, latest survey data for Scotland revealed an improvement in economic conditions, but upon closer inspection we see that the upturn was solely driven by the service sector, as manufacturing weakness continued.
“Firms recorded a cautious year-ahead outlook, with business confidence at a two-anda-half-year low in April.”
Meanwhile, a separate study from accountant and business advisor BDO found UK business output growth in April declined for the first time this year, as its output index fell from 98.74 to 98.63 last month.
Business confidence slipped by 0.36 points to 95.74 – the lowest level the index has been since 2012.