THE pace of decline in Scottish private sector output slowed sharply last month but remained significant as services output continued to be depressed by Covid-19 lockdown measures, while manufacturing returned to growth, a survey reveals.
The impact of Brexit on fuelling Scottish companies’ costs was also evident in the survey. Among the 12 nations and regions of the UK covered by the survey, the decline in output in Scotland was the third-sharpest, with only Wales and Northern Ireland seeing steeper drops.
Although employment in the Scottish private sector economy declined for a 13th straight month, the fall in February was the least-marked for a year, according to the survey published today by Royal Bank of Scotland. And Scottish businesses’ confidence about prospects for future activity was the highest since records began in 2012.
The seasonally adjusted Scottish business activity index rose from 33.3 in January to 44.1 in February, signalling a sharp slowing of decline but still well below the 50 no-change mark.
Spelling out the Brexit impact, Royal Bank said: “February data marked a ninth successive monthly increase in cost burdens facing Scottish private sector firms. Moreover, the latest rise was the fastest for a year. Greater raw material costs, price hikes at suppliers, higher logistical expenses and fees associated with Brexit were the main drivers of inflation according to respondents.”
Malcolm Buchanan, who chairs Royal Bank’s Scotland board, said: “Scottish companies reported the strongest level of business confidence on record in February, with the lockdown roadmap prompting hopes of easing restrictions and a strong economic recovery in the coming year.”