• Business output increases for first time in six months and business sentiment improves to 16-month high
• Scotland is the only UK area to record increasing employment for the month
• Judith Cruickshank, Scotland Board Chair, Royal Bank of Scotland, welcomed “tentative growth”, while warning of the impact of recent international developments

The headline Royal Bank of Scotland Growth tracker– a seasonally adjusted index that measures the month-on-month change in the combined output of Scotland’s manufacturing and service sectors – posted an eight-month high of 50.9 in February, up from 50.0 in January, thereby indicating the first month of growth since August last year.

Sector data noted that the upturn in output was driven by Scottish service providers, where a modest expansion in business activity offset a steeper decrease in manufacturing production. 

For the first time since last September, Scottish private sector companies recorded a rise in employment. The pace of job creation was modest, but nevertheless the strongest monthly rise since October 2024. Panellists reported that additional staff were onboarded due to planned company expansions.

Commenting on the Tracker’s findings, Judith Cruickshank, Scotland Board Chair, Royal Bank of Scotland, said: 

"After six months of contraction, it is positive to see Scotland’s business community moving back into tentative growth territory in February, on the back of improving service sector performance. 

"Overall business confidence across Scotland also improved as more firms anticipate activity levels to expand over 2026. This in turn supported a fresh increase in staff hiring, which contrasted with reductions seen elsewhere across the UK.

"However, the pace of growth is weak, with manufacturing seeing a further drop in output. Further, while our Royal Bank of Scotland Growth Tracker data found that inflation slowed in February, the impact of recent international developments on travel, trade, supply chains and energy prices and consequentially broader inflation will be a cause for concern for Scottish businesses and for consumers."

Please see the regional report in full:

Royal Bank of Scotland Regional Growth Tracker (PDF, 3,000KB)