Covid in Scotland: Output 'boosted by looser restrictions'
- Published
The survey found the latest rise in new business was led by the services sector
Looser Covid restrictions helped boost Scottish private sector output to near record levels last month, according to a report.
A regular RBS survey of purchasing managers found a steep rise in new business, with firms hiring more staff for the third month in a row.
"Improved client confidence" was among other reasons cited for the upturn.
The rate of output growth was slower than May's, but was still the second quickest since September 2013.
The survey follows a separate RBS report on jobs, which found hiring activity at Scottish businesses continued to surge last month, amid easing Covid-19 restrictions and rising economic activity.
The bank's latest PMI index - which measures combined manufacturing and service sector output - posted 58.4 in June, falling from May's survey record of 61.5.
Any figure above 50 suggests economic expansion.
The survey indicated that the latest increase in new business was broad-based and led by services, with goods producers seeing growth slow on the month.
Meanwhile, input prices faced by private sector firms continued to soar during June, with the rate of inflation the fastest since February 2011.
Panellists attributed greater costs to material shortages, price hikes at suppliers, Brexit and higher fuel and utilities prices.
In response, Scottish private sector firms increased their average charges for the eighth month running.
According to the survey, companies remained optimistic about activity over the coming year.
That confidence was linked to looser lockdown restrictions and the subsequent reopening of some sectors, as well as "surging inflows" of new work and hopes of a strong economic recovery.
RBS Scotland board chairman Malcolm Buchanan said the June data showed "some signs of optimism" for the Scottish firms.
"The rates of increase in both business activity and new work slowed only slightly from May's respective series records and remained marked," he said.
"Inflationary pressures are a key concern, however, as material shortages and greater fuel and utilities fees continued to put severe upward pressure on input costs and, subsequently, selling prices."
In a separate development, Scotland's public spending watchdog has warned of "acute and unpredictable" financial pressures that will require co-operation between Scottish and UK governments.
Scotland's auditor general Stephen Boyle said in a blog on Friday that the response to Covid had made finances more complex than ever, and managing volatility would be difficult.
He warned that the £4.6bn committed to Covid spending for this year was not guaranteed by the UK government and could be increased or reduced.
Mr Boyle said there was a need for effective communication and co-operation between Downing Street and Holyrood.
He added that acute and unpredictable financial pressures did not only come from the public health crisis, but from backlogs in the NHS and courts.
- Published8 July 2021
- Published1 July 2021
