Growth hits six month high in Scotland
1 min read
The manufacturing sector helped the recovery in Scotland's private sector economy continue into the second half of the year, July's Bank of Scotland PMI (Purchasing Managers' Index) report has showed.
Business activity rose at the fastest rate in six months and a robust increase in overall new business was recorded, despite persistent weakness in manufacturers' export sales.
Scottish private sector output increased at a sharp and accelerating rate in July. This was highlighted by the headline Bank of Scotland PMI (a single-figure measure of the month-on-month change in combined manufacturing and services business activity) posting at a six-month high of 56.8.
The level of new orders at manufacturers increased, stretching the current sequence of growth to 19 months.
Input price inflation in the manufacturing sector ticked up for the second month in a row in July although it remained weak by the historical standards of the survey. Higher raw material prices were mentioned by a number of firms, while others commented that strength in sterling had kept a lid on overall cost pressures.
Manufacturing output rose at the fastest rate in four months in July, the pace of expansion having accelerated for the second month in succession. Factory output has now risen in 15 of the past 16 months (output stagnated briefly last November).
Donald MacRae, chief economist at Bank of Scotland, said: "Employment and new business both expanded in the month [July] across manufacturing and services, but the level of manufacturing new export orders fell, illustrating the challenges for exporters from a strong pound and weak growth in the Eurozone economies."
He added: "The recovery continues with the Scottish economy entering the second half of the year in growth mode."
