By Ian McConnell
Business Editor
GROWTH of Scotland’s private-sector economy accelerated in January, even though the manufacturing sector contracted again, a survey shows.
And businesses north of the Border were at their most optimistic for six months about the prospects for increased activity on a one-year horizon, according to the Royal Bank of Scotland purchasing managers’ index (PMI) report published today.
The rate of increase of prices charged by Scottish companies accelerated between December and January, and was among the sharpest on record, Royal Bank noted.
It added: “Respondents linked the latest uplift with efforts to maintain margins amid surging input costs.”
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Cost pressures for companies remained “intense”, the survey signalled, with firms reporting surging material, utility, fuel and wage costs, as well as price hikes at suppliers. However, the rate of increase of costs, while once again among the sharpest on record, eased further.
The business activity index for Scotland rose from 52.7 in December to 53.7 in January on a seasonally adjusted basis, moving further above the level of 50 deemed to separate growth from contraction and signalling the 11th consecutive month of expansion.
Scotland’s growth rate in January was the eighth-fastest among the 12 UK nations and regions.
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Services drove the growth, while the rate of manufacturing decline eased from that in December.
Scottish companies, overall, recorded a 10th straight month of rising inflows of new work, with survey respondents flagging strong demand conditions arising from the easing of lockdown measures and improved customer confidence, but the rate of increase was modest.
The rise in optimism about prospects on a 12-month view was “attributed through anecdotal evidence to hopes of strong demand as Covid-19 restrictions are loosened”, Royal Bank said, with both services companies and manufacturers more confident in January.
Both the Scottish manufacturing and services sectors recorded rises in staffing in January.
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