Private sector output growth in Scotland strongest in over four years in August
Staff Writer |
According to the latest Royal Bank of Scotland PMI, private sector businesses expanded activity sharply in August.
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New order receipts remained favourable, leading to a third monthly rise in backlogs of work.
Firms continued to hire additional staff, but the rate of increase slowed to a mild pace.
Higher workforce numbers in conjunction with sterling weakness contributed to a further sharp rise in operating costs.
Subsequently, output charges rose.
The seasonally adjusted headline Royal Bank of Scotland PMI picked up further in August, registering at 55.5, from 55.1 in July.
Growth has accelerated in each of the past five months, and the latest figure was indicative of the strongest pace of expansion for just over four years.
Panellists suggested that successful contract tendering and new customer wins supported the upturn in August.
That said, the sector breakdown signalled that the services economy was the key growth driver, with manufacturing sector output rising only mildly and at the weakest pace in three months.
Scottish private sector firms recorded positive sales performances in August.
New business expanded solidly and at a faster rate than the UK average, despite growth easing to a three-month low.
Demand conditions were notably more favourable in the crucial service sector, however, while order book volumes in the manufacturing sector rose only mildly.
The backlog of work at Scottish private sector companies rose midway through the third quarter.
The rate of accumulation, albeit only modest, was the second-strongest of all 12 monitored UK regions.
As part of efforts to alleviate capacity pressures, private sector employment was increased.
Workforce numbers have been boosted in each of the past six months, but the latest rate of job creation was the weakest seen over this period.
Sector data revealed the first monthly decline in manufacturing staffing levels since January 2017.
Staffing costs were reportedly a factor driving input costs higher in August.
Panellists also attributed increased expenses to sterling weakness, as well as greater food and fuel prices.
The rate of inflation was sharp overall and accelerated since July.
In response, output charges were increased.
Manufacturers raised selling prices to a stronger degree than their serviceproviding counterparts.
Businesses continued to anticipate greater activity over the coming year.
However, the degree of confidence eased to a nine-month low.
The strength of sentiment was broadly equal across services and manufacturing. ■
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