Scotland economy: Jobs growth quickens as output picks up: Royal Bank PMI

The Royal Bank of Scotland’s Purchasing Managers’ Index (PMI) report showed employment grew strongly north of the border last month, with the rate of increase increasing at the joint-fastest pace since October 2021. Among UK countries and regions, only Northern Ireland recorded the fastest growth in employment.

Royal Bank Scotland board chair Judith Cruickshank said despite an increase in Scottish payrolls, the volume of uncompleted jobs north of the border continued to grow following 10 months of decline, „suggesting renewed pressure on capacity”.

The rate of input price inflation in Scotland in April was the strongest in three months and elevated by historical standards. Businesses surveyed say costs are rising due to higher food, energy and supplier costs, as well as increased wages.

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The headline business activity index for Scotland rose to 54.3 in April from 52.9 in March on a seasonally adjusted basis, and was unchanged above 50, indicating a strong expansion.

Despite this, Scotland recorded the second weakest reading of confidence from firms about the prospects for increased activity over a 12-month horizon, with only Northern Ireland recording lower confidence. Nevertheless, Scottish companies were largely optimistic on this front.

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Last month companies across Scotland increased their charges for goods and services at the sharpest pace since January. Both manufacturers and producers of goods increased their selling prices at a faster rate, the survey showed. However, overall output price inflation across Scotland was softer than the UK average.

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Ms Cruickshank said: „Private sector firms across Scotland have recorded further increases in activity and new business over the latest survey period, with the former expanding at the fastest pace in 10 months. The positive trends have prompted firms to increase their hiring activity. Payroll numbers have risen every month since February, with the latest round Job creation has been compound-strong in the year-and-a-half.”

He added: “Looking ahead, sentiment among private sector firms about future output remained weak in the quarter but stronger than historical averages, with expectations of improved demand conditions supporting output growth.

„Elsewhere, data pointed to stubborn price pressures. Both input and output price inflation hit three-month highs in April, although they remained below 2022 peaks.”

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