Scotland’s private sector employment growth last month accelerated to its fastest pace since May 2023, and the rate of increase was the third-highest among the 12 UK nations and regions, a key survey shows.
The latest Royal Bank of Scotland growth tracker shows the private sector economy north of the Border achieved a ninth consecutive month of growth during September.
While private sector economic growth in Scotland slowed between August and September, with the business activity index declining from 52.7 in August to 51.2 last month on a seasonally adjusted basis, the rate of decline in manufacturing output eased significantly to be only fractional. A cooling of services expansion drove the overall slowdown in Scottish private sector growth last month.
Read more
- Scottish hotel sold by family-owned company
- Ian McConnell: Whisky giant not shouting from rooftops. So what’s going on?
The business activity index measures combined manufacturing and services output, with a reading above 50 signalling expansion.
Royal Bank, part of NatWest, noted growth in private sector employment in Scotland last month was driven by services firms, with the manufacturing workforce “broadly stable”.
Only Northern Ireland and north-east England saw faster private sector employment growth than Scotland last month, among the 12 nations and regions of the UK.
And half of the nations and regions recorded a decline in employment in September.
Royal Bank said “The labour market remained a strong point for the Scottish private sector. Outstripping the UK-wide average, the rate of job creation hit a 16-month high and signalled a sharp rise in staffing levels. Growth was driven by services firms as manufacturing employment was broadly stable.”
Scotland was ranked eighth out of the 12 nations and regions of the UK in terms of its rate of expansion of business activity in September, ahead of the West Midlands, east of England and Yorkshire & Humber, which recorded weaker growth, and Wales, which experienced a contraction.
Northern Ireland was top of the private sector economy growth table last month.
Read more
- Ian McConnell: Laughable Labour should put money where mouth is on ScotRail fares
- Accountancy firm prepares to move hundreds of staff in Scottish city
Sebastian Burnside, chief economist at Royal Bank of Scotland, said: "September's growth tracker report showed greater variation in performance across the UK's nations and regions compared to the situation in August when activity rose universally.
“Output still increased in almost all places, but at one end of the scale there was strong and accelerated growth in Northern Ireland and at the other end was a decline in activity in Wales.”
He added: “At the same time, we saw some divergence in labour market trends, with only half of the 12 nations and regions recording a rise in employment in September, down from 10 in August. It was a similar picture for business confidence, which, whilst generally remaining positive, decreased in just over half of cases.”
The survey shows a sharp fall in new orders for Scottish manufacturers in September, indicating continuing challenges even though the decline in activity in this sector eased to be only marginal last month.
Judith Cruickshank, who chairs Royal Bank’s Scotland board, said: “Scotland wrapped up the third quarter on a positive note. Sustained growth in new business inflows enabled firms to increase their activity levels, although the pace of growth slowed. Notably, hiring activity surged, with job creation reaching its highest level since May 2023. Expansions in new business, activity, and employment were driven by service firms, while manufacturers experienced broadly stable output and jobs but a sharp fall in new orders.”
She added: “The steeper decline in factory orders indicates more challenges for the Scottish manufacturing sector in the coming months. The uncertain political and economic landscape will also act as headwinds to growth, leading the Scottish private sector to increasingly depend on its service firms to drive the economy forward in the coming year. However, price pressures remained on an easing path, with cost burdens rising at the weakest pace in 43 months.”
A separate survey of business leaders published today by the Institute of Chartered Accountants in England and Wales shows confidence in Scotland has declined slightly but “remains high and broadly in line with the UK average”.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here