Covid in Scotland: Business confidence 'soars despite downturn'
- Published
- comments
Scottish private sector confidence has climbed to its highest level for nearly seven years despite a sharp drop in output last month, a survey has found.
The latest Royal Bank of Scotland PMI indicated stricter lockdown rules "stifled" demand in January.
That led to steep drops in both activity and new business for firms.
But the survey found optimism rose on the back of the Covid vaccine rollout, as well as hopes of looser restrictions and a solid economic recovery.
January was a particularly poor month for business activity north of the border, with Scotland seeing the steepest drop in output of goods and services of any monitored area of the UK.
The bank's business activity index, which measures combined manufacturing and service sector output, posted 33.3 in January, down from 47.3 in December.
Excluding the period between March and May last year, the latest reading was the lowest on record.
Scotland also registered the quickest drop in new work across 12 UK areas.
Respondents attributed that fall to stricter Covid-related measures, which the bank said "stymied" client demand.
Meanwhile, companies reported making further cuts to staff numbers, with service providers seeing more widespread reductions than manufacturers.
'Lockdown toll'
RBS Scotland board chairman Malcolm Buchanan said: "Stricter lockdown measures took a toll on the Scottish private sector during January, with the downturn worsening amid steep drops in both activity and new business.
"The falls remained slower than at the height of the first lockdown last spring, perhaps reflective of companies adapting to restrictions, but were still severe."
He added: "Positive news again came from business confidence, which was the strongest since April 2014 amid hopes of an economic recovery once restrictions are lifted.
"Conditions will remain very challenging in the meantime, but there is a light at the end of the tunnel for Scotland's economy as the vaccine rollout progresses and measures are loosened."
