Scottish private sector growth accelerated in July, with the country ranking fifth among the 12 UK nations and regions, a key survey shows.
Royal Bank of Scotland’s latest growth tracker data, published today, also shows the private sector economy north of the Border last month enjoyed an acceleration in employment growth and a rise in optimism in terms of expectations of increased activity on a 12-month horizon. Scotland also recorded a renewed upturn in new business inflows.
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The headline business activity index for Scotland, which measures combined services and manufacturing output, rose to 52.7 last month from 51.9 in June on a seasonally adjusted basis, coming in above the level of 50 deemed to separate expansion from contraction for a seventh consecutive month. Growth in Scotland’s private sector economy had slowed in June.
Only Northern Ireland, south-west England, London and south-east England recorded stronger private sector growth than Scotland in July.
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Royal Bank noted the latest reading for Scotland “signalled a solid start to the third quarter”.
However, it observed that the growth in private sector activity in Scotland was “again centred at service firms”, as goods producers recorded a further drop in output.
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Judith Cruickshank, who chairs Royal Bank’s Scotland board, said: "The Scottish private sector signalled a solid start to the second half of the year, backed up by a strongly performing service sector. Growth in the service sector was again able to mask the downturn at manufacturers, with service firms noting improving underlying demand trends.
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“Moreover, optimism towards the year-ahead outlook was firmly optimistic, as confidence levels strengthened on the month. Private sector employment also ticked up in July, the rate of job creation quickening from June.”
However, she added: “Inflationary pressures intensified during the latest survey period and could pose a concern to firms in the coming months."
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