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Scotland posts fastest growth in seven months

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Christian Fernsby ▼ | July 9, 2019
Britain   Supporting the upturn were greater inflows of new business

According to the latest Royal Bank of Scotland PMI, Scotland was among the top-performing parts of the UK during June, as activity growth was reinstated following a slight drop in May.

Supporting the upturn were greater inflows of new business, however there were some signs of underlying fragility within the Scottish economy.

Job creation slowed to a fractional pace, selling price inflation eased and business confidence remained historically weak.

The seasonally adjusted headline Royal Bank of Scotland Business Activity Index rose to 51.3 in June, up from 48.9 in May, signalling a renewed rise in private sector output.

For the second quarter as a whole, the headline index averaged 50.4 and was indicative of slight growth as expansions in June and April offset May's mild contraction.

However, as has been the case across 2019 so far, manufacturing weakness carried on into June, with services activity being the driven force behind the latest upturn.

Despite this, output growth in Scotland was the joint thirdstrongest of all 12 monitored areas of the UK, contrasting with a downturn for the UK overall.

New orders picked up at the end of the second quarter in Scotland amid reports of improved marketing and new project wins.

Split by sector, survey data revealed that new business inflows were focused within the services economy, as manufacturing demand fell for a tenth successive month.

Nevertheless, as was the case with output, overall sales growth in Scotland during June compared with reduced order book volumes at the UK level.

Despite June's up-tick in new work which was the strongest in seven months - order book volumes have been stable on average across 2019 so far.

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