Scotland's economy: private sector growth and confidence rising

Growth momentum in Scotland's private sector increased last month, with output reaching the highest level since February, according to data published today.

But Bank of Scotland said growth remains below that of the UK as a whole. Picture: John Devlin

The Bank of Scotland’s regional purchasing managers’ index (PMI), which measures the month-on-month change in combined manufacturing and services output, rose to 51.5 in May from 50.6 in April.

Businesses put the growth down to expansion in the services sector, while manufacturing production also remains strong.

• READ MORE: Optimism dips amid gloomy outlook for service sector

May’s data also indicates a rise in business confidence towards the next 12 months, hitting a four-month high. The firms surveyed in the report attributed confidence to “an unexpected economic upturn”.

Own an innovative start-up? Find out how to win £5,000 for your business

Fraser Sime of Bank of Scotland said: “Latest PMI data signalled the Scottish private sector moving up a gear, as growth reached a three-month high.

“The positive news was driven by rises in combined output and new orders, fuelled by solid underlying demand.”

200 Voices: find out more about the people who have shaped Scotland

Cost pressures eased, although only marginally, and remained steep overall, with high raw material prices one factor cited.

Sime said: “Easing price pressures added to the overall improvement in business conditions. That said, Scottish private sector growth remains below that of the UK as a whole.”

Economy secretary Keith Brown said the figures “show the Scottish economy remains resilient and we will continue to do all we can to support growth.”

Click here to ‘Like’ The Scotsman Business on Facebook