- Rising backlogs of work point to pressure on business capacity
- Private sector activity falls for first time in three months
- Charge inflation weakest in a year
The headline Royal Bank of Scotland Growth Tracker– a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – fell to 48.7 in July from 50.9 in June. This signalled a renewed fall in private sector activity following two consecutive months of growth. Positively, underlying data showed that the recent decline in manufacturing output had slowed, while services activity ticked down slightly after growing solidly in both May and June.
Commenting on the Tracker’s findings, Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, said: "The start of the second half of the year largely mirrored the conditions observed in the first six months of 2025, with some positive signs in the services sector seen alongside more challenging conditions facing manufacturers. "Encouragingly, the accumulation of outstanding work, which points to pressure on business capacity, could create opportunities for job growth in the coming months. Notably, the uptick in backlogs marked the first increase in 14 months, with Scotland defying the broader UK trend. Moreover, while nearly all parts of the UK highlighted challenges facing local labour markets, Scotland emerged as one of the few areas demonstrating resilience. "Scottish firms have also displayed flexibility regarding pricing. Although cost pressures have intensified, charges for Scottish goods and services increased at a softer pace, marking the weakest rise in a year. In light of current demand headwinds, Scottish firms are trying to stay competitive, even at the expense of their own profit margins it may seem."
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