Scottish economy success is good news for all, or is it?

Brexit, as we should all know even if Prime Minister Rishi Sunak and Labour leader Sir Keir Starmer would seemingly rather not acknowledge the inconvenient reality, continues to take a very heavy toll on the UK economy.

So, against this backdrop, it was heartening indeed in a Scottish context to observe the economy north of the Border highlighted as a “standout” performer among the nations and regions of the UK, in a survey this week.

Scotland’s private sector economic growth accelerated last month to the fastest pace in two years, according to the latest PMI (purchasing managers’ index) report from Royal Bank of Scotland published on Monday.

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The survey shows that Scotland’s private sector growth in May was second-fastest among the UK’s 12 nations and regions, behind only Northern Ireland and ahead of London.

What is more, the acceleration of growth in Scotland contrasted with a slowing of expansion in the overall UK private sector economy last month.

Sebastian Burnside, chief economist at Royal Bank of Scotland, declared: “The month's standout performers were Northern Ireland and Scotland, where rates of expansion went against the trend and accelerated. London has been leading the recovery up to now, but growth in the capital lost some momentum in May and was more aligned with the overall UK rate.”

And the good news for the Scottish economy did not stop there.

Employment growth in Scotland was third-fastest among the UK nations and regions, behind only Northern Ireland and north-west England, accelerating in May to its fastest pace in three months.

It should, of course, be noted that the growth in activity and employment in Scotland was driven by the services sector, with manufacturing seeing contraction.

And it would be preferable to have more balanced growth.

However, in the UK as a whole, the manufacturing sector has not had its troubles to seek, notably on the export front in this post-Brexit world.

A survey published earlier this month by the Chartered Institute of Procurement & Supply and S&P Global showed UK manufacturing activity returned to growth in May, but the rate of expansion was relatively modest. The purchasing managers’ index for UK manufacturing, a composite measure of activity, rose to 51.2 on a seasonally adjusted basis last month, from 49.1 in April, but the latest reading is not that far above the level of 50 deemed to separate expansion from contraction.

READ MORE: Scotland 'standout' performer on economy in UK

And CIPS and S&P Global observed: “The upturn in demand was centred on the domestic market, as new export orders fell for the twenty-eighth month in a row. There were reduced inflows of new work from several trading partners, including the US, the EU (with specific mentions of Germany and Poland) and the Middle East.”

The better news on the UK manufacturing export front, for what it was worth, was that the rate of contraction last month was the joint-weakest in the current sequence of decline, matching March 2022.

It is certainly not the brave new world of booming international trade that the Brexiters hinted at once we were “free” of what they perceived (bizarrely) to be the shackles of European Union membership.

Judith Cruickshank, who chairs Royal Bank’s Scotland board, observed the “Scottish private sector exhibited further gains midway through the second quarter”.

She noted “the upturn was contingent on the sustained rise in services activity, which rose at a sharp and quicker rate and was vital in offsetting the shortfalls seen at manufacturers”.

Ms Cruickshank declared: “While the service sector looks set to expand in the coming months as expectations for future activity strengthen, the manufacturing sector will only hold back growth momentum, unless demand for goods picks up.”

Clearly, it would be good to see the Scottish manufacturing sector return to growth in the Royal Bank survey.

That said, we need to be mindful of the pressures on manufacturing across the UK.

And the scale of the services sector in Scotland and the UK as a whole means that its health is crucial. What is more, we should most definitely celebrate the fact that the services sector showing north of the Border is sufficiently strong to ensure impressive overall growth of the private sector economy even at a time when manufacturing is contracting.

The headline business activity index for Scotland – which measures the month-on-month change in the combined output of the manufacturing and services sectors – rose to 55.2 in May from 53.8 in April on a seasonally adjusted basis in the Royal Bank survey.

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That signals that the overall rate of growth in Scotland’ private sector economy is healthy.

Many people in Scotland might be surprised about this, given the negativity about the economy north of the Border that is so prevalent and often seems to be politically and/ or constitutionally motivated.

Whatever people’s politics, and regardless of the fact that a General Election is looming on July 4, the strength of Scotland’s private sector economy evident in the latest Royal Bank survey should be a matter for at least great relief, amid the gloom, and even for celebration.

The latest survey findings might not be the doomsayers’ cup of tea. In some instances, that might be putting it mildly. There are some who at times seem almost angry to hear that the Scottish economy is doing well.

However, whatever those who would do Scotland down might think, any and all indications of strength for Scotland’s economy are surely very welcome in these most difficult of times for anyone genuinely interested in the nation’s prosperity, regardless of any political views.