Royal Bank of Scotland PMI report for November 2022

Business conditions continue to worsen across all UK regions

Key findings

  • Further broad-based decline in business activity in November
  • Expectations improve in most areas but still historically subdued
  • Cost pressures remain elevated, and even intensify in majority of cases

Business activity fell in all areas, while there were also further signs of a slowdown in local labour markets. Expectations towards the year ahead generally improved after having slumped in October, but they nevertheless remained subdued by historical standards amid persistent strong inflation and recession worries.

The PMI Business Activity Index is the first fact-based indicator of regional economic health published each month, tracking the monthly change in the output of goods and services across the private sector. A reading above 50 signals growth, and the further above the 50 level the faster the expansion signalled.

All 12 monitored regions recorded a further fall in business activity in November. Rates of contraction did, however, slow in just over half of cases, including Wales and the North East, the two top-ranked areas, where activity came close to stabilising (business activity indexes at 49.8 respectively). Scotland (43.9) recorded the most marked fall in output, followed by the South West (45.3).

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, commented:

"The latest survey data signalled a stronger contraction across the Scottish private sector during November, as demand waned amid market uncertainty and the cost of living crisis. As a result, both activity and incoming new business fell as sharpest rates in the current four- and five-month sequences of reductions. 

"Adding further strain on the sector was the continued intensification of price pressures. After cooling over the summer, input price inflation again accelerated in the fourth and final quarter of the year. Additionally, rates charged by private sector firms also increased at a quicker rate during November as firms tried to recoup costs. 

"Overall, the penultimate month of the year pointed to confidence among private sector firms registering less upbeat than that seen in October, as economic challenges and feeble demand weighed on exceptions."

Download the Scotland PMI Report November 2022 (PDF, 370KB)

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