Monday, 13 July 2021 09:15

Scottish private sector sustains growth in June

The growth of Scotland’s private sector was sustained during June, according to the latest Bank of Scotland PMI figures.

The Purchasing Managers Index offers a single-figure measure of the month-on-month change in combined manufacturing and services output. Over June, this figure fell slightly – to 51.2 from May’s 51.9 – but still signalled continued growth.

An increase of activity was recorded in the service sector, in line with higher levels of incoming new business.

However marginal falls in manufacturing output and new orders were registered over the month, with the reports that total demand, both domestic and foreign, was being weighed upon by unfavourable exchange rates and weaknesses in the oil and gas sector.

Staffing levels saw little change, but slight growth meant that a net increase in employment has been recorded for five consecutive months. In line with the sustained increases in new business, services remained the primary source of job creation. However, a slight fall in job numbers was registered for manufacturers due to excess capacity in the sector.

Average prices also increased over the month, with service providers recording a much steeper rise in operating expenses compared to manufacturers, as a result of higher salary costs.

Donald MacRae, Chief Economist at Bank of Scotland, said: “June was another month of growth continuing the pickup in activity starting in April. But the growth appears confined to the services sector. In contrast manufacturing showed declining output, employment and new orders.

“New export orders showed a fifth consecutive monthly fall, illustrating the challenge of exporting with a strong pound sterling. The Scottish economy continues to make a moderate recovery from the slowdown of the first quarter.”

Minister for Business, Fergus Ewing, said: “We welcome the latest results from the PMI, which signalled continued expansion in private sector activity in Scotland in June. Services was at the forefront of the growth in both output and employment.

“Whilst conditions remain challenging for manufacturers, with many citing the strength of the pound as a barrier to exporting, the composite indicator for new business signalled continued expansion and recent independent forecasts suggest a positive outlook for the rest of 2015.”

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