Scotland’s private sector has recorded its strongest monthly rise in output in seven months, though growth remained solely driven by the services sector.
The Royal Bank of Scotland Growth Tracker also reveals a rise in Scottish companies’ overall optimism about the prospects for increased business activity.
There was a marginal drop in employment, as its labour market proved second-most resilient in the UK in June.
Manufacturing companies in Scotland recorded a ninth successive monthly fall in incoming new orders during June, as services firms reported a further expansion.
Scotland was placed sixth in the league table of the 12 UK nations and regions in terms of growth of its private sector economy in June. In May, it was in fifth place.
The headline Royal Bank growth tracker for Scotland – which measures the month-on-month change in combined services and manufacturing output – rose to 50.9 in June from 50.5 in May on a seasonally adjusted basis. A level above 50 represents expansion.
Royal Bank noted: “While the uptick was modest overall, it was the strongest since November 2024.”
Judith Cruickshank, who chairs Royal Bank’s Scotland board, said: “Scotland’s private sector recorded a sustained uptick in activity at the end of the second quarter, with growth predominantly driven by service providers. In contrast, the manufacturing sector faced a challenging demand environment, leading to overall declines in new business and production.
“Despite these sectoral differences, firms exhibited increased optimism about the future, with manufacturers reporting positive growth forecasts for the first time in three months.”
Sebastian Burnside, chief economist at Royal Bank of Scotland parent company NatWest, said of the UK picture: “It was a positive end to the second quarter, with most UK nations and regions back in growth territory.”
He added: “The labour market is the main weak spot at the moment, as the combination of wages pressures and underutilised capacity encourages firms to look for productivity gains where possible.
“Encouragingly, cost inflation has come down from the highs seen in the spring, dropping even further in June across most parts of the UK. Businesses in all areas have been able to make smaller and smaller price increases of their own in [the] last couple of months, relieving some of the pressure on demand.”
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