Royal Bank of Scotland PMI report for July 2023

Business activity growth softens as manufacturing output contracts sharply.

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Key Findings

  • Growth in activity driven by the service sector
  • manufacturers signal a sharp reduction in output 
  • Cost inflation cools further but remains historically elevate


According to the latest Royal Bank of Scotland PMI® survey, Scottish private sector companies expanded their output for the sixth successive month in July. That said, the rate of increase slowed since June as the seasonally adjusted Composite Output Index fell to 51.1 from 53.2. Trends diverged on a sector level with service providers continuing to report modest, albeit slightly softer growth in business activity. Goods producers, however, signalled a renewed and sharp contraction in output amid reports of demand shortfalls. 

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, commented: "The start of the second half of the year saw a slowdown across the Scottish private sector amid a softer expansion in output, while new business remained broadly unchanged from June. Data split by sector highlighted that growth was skewed towards the service sector. Goods producers, meanwhile, pointed to a continual and accelerated drop in factory orders which then fed into a fresh contraction in manufacturing production. “The overall cooling in business activity growth meant that employment levels were raised only fractionally in July. Moreover, the rate of job creation was the weakest seen in the current six-month spell of employment growth. With the level of outstanding business falling for the third month straight, there’s less incentive for firms to raise workforce numbers in the coming months. Additionally, the outlook for business activity remained historically muted, with confidence printing the weakest since January."


Please see the report in full:


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


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