Royal Bank of Scotland PMI report for May 2023

Private sector expansion slows amid fresh decline in manufacturing output

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The Scottish private sector signalled a mild expansion in activity midway through the second quarter, according to the latest Royal Bank of Scotland PMI® data. However, the seasonally adjusted Business Activity Index slipped from April’s ten-month high of 54.3 to 50.7 in May - the weakest reading in the current four-month sequence of growth. Sector data highlighted that the rate of growth in services business activity moderated on the month, while a second successive month of reduction in manufacturing new orders resulted in a fresh reduction in goods output. Overall growth in new business remained modest as an accelerated expansion at service providers masked the downturn at manufacturers. Nonetheless, companies further expanded employment with both sub-sectors registering solid rates of job creation, albeit at slightly softer rates than seen in the previous survey period. 


Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, commented: "Scotland’s private sector started the second quarter with a solid rise in output in April, but May’s data signal a loss of momentum as services growth slowed and manufacturing output fell for the first time in four months. The latest expansion in private sector output was the softest in the current sequence of expansion that began in February. Inflationary pressures cooled as cost burdens rose at the softest pace in two years. Nonetheless, both input price and output charge inflation remained stubbornly elevated, and much above their respective pre-pandemic trend levels. 

“On a positive note, firms continued to expand workforce numbers. Moreover, solid hiring was reported across both sub-sectors. Additionally, optimism remained strong as private sector firms anticipated growth in the coming year”.


Please see the report in full:

Scotland PMI Report May 2023

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