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Economics

Royal Bank PMI report for August 2023

No change in private sector business activity in August

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Key Findings:

  • Output fails to expand for first time in seven months
  • Firms record a modest fall in new business
  • Confidence levels dip to eight-month low

The latest Royal Bank of Scotland PMI® survey highlighted no change in business activity across the Scottish private sector midway through the third quarter. The headline Scotland Business Activity Index slipped to 50.0 in August, from 51.1 in July, thereby marking the end of a six-month period of growth. Moreover, new orders fell for the second consecutive month and at an accelerated pace as service providers joined their manufacturing counterparts in the downturn. Meanwhile, private sector companies still registered historically sharp increases in their cost burdens; as a result, charges for goods and services were also raised sharply. Moreover, business confidence slipped to an eight-month low. 

 

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, commented: "The latest PMI data for Scotland pointed to emerging weakness in the Scottish private sector, with firms signalling no change in private sector output and new orders contracting modestly amid reports of economic uncertainty and falling demand. Declining business requirements could result in a reduction in output unless the demand picture improves. "Moreover, higher material, labour and energy costs meant that firms continued to struggle with rising cost burdens. In turn, companies raised their charges for the provision of goods and services. Lastly, business confidence around the year-ahead outlook remained historically subdued and weakened to an eight-month low, as frail demand conditions, higher interest rates and inflation all weighed on expectations."

 

Please see the report in full:

 

Royal Bank of Scotland UK Regional PMI (PDF, 242KB)

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