Home Business Private sector expansion slows as output falls

Private sector expansion slows as output falls

Private sector expansion slows as output falls

According to the latest PMI data from the Royal Bank of Scotland, the Scottish private sector signaled a slight increase in activity in the middle of the second quarter.

However, the seasonally adjusted Business Activity Index fell from 54.3 in April, a 10-month high, to 50.7 in May – the weakest reading in the current four-month growth series.

Industry data showed that the growth rate of services sector activity slowed, while a second consecutive month of decline in new orders in manufacturing resulted in a further decline in goods production.

Overall growth in new business remained modest as accelerated expansion in service providers masked the decline in manufacturers. Nevertheless, companies continued to expand employment, with both subsectors recording solid job creation.

For the fourth consecutive month, Scottish private sector companies recorded an increase in new business in May. Where an increase was reported, respondents linked this to the acquisition of new customers and the start of new projects.

Industry data, however, pointed to increasing divergence as faster growth in new customers in service companies helped offset a faster downturn in goods manufacturers. Overall expansion in Scotland was weaker than in the UK as a whole.

Confidence levels across Scotland remained unchanged from the previous survey period in May. Companies were bullish on business growth over the next 12 months, with expectations focused on increased customer demand, new product launches and resilient markets.

Previous articleTenants whose landlords live abroad will have to deal with new administrative hassles about taxes
Next articleJune: Cost of living crisis financial justice tracker | News and features