Scotland in top half of UK league table on two measures

The Scotland business activity index – which measures the month-on-month change in the combined output of the manufacturing and services sectors – dipped to 51.1 last month from 51.3 in October on a seasonally adjusted basis but stayed above the level of 50 deemed to separate expansion from contraction.

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This index reading of 51.1 meant that Scotland recorded the fifth-fastest private sector economic growth among the 12 UK nations and regions for a second consecutive month in November. Scotland was in November behind London, and north-east and south-west England, and Northern Ireland in the growth league table.

Five English regions, and Wales saw overall declines in private sector business activity in November, the survey shows.

Royal Bank said of the overall rise last month in private sector business activity in Scotland: “The uptick was dependent on the solid performance of service sector firms. Manufacturers, meanwhile, again struggled to report growth and slumped further into contraction.”

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Employment in Scotland’s private sector economy recorded its 22nd consecutive month of growth in November. This was in contrast to a second straight monthly fall in employment in the UK as a whole. And Scotland was fourth among the 12 UK nations and regions for employment growth last month.

However, Royal Bank said the overall growth in employment in Scotland in November was “minimal and the weakest since July 2023, influenced by a deepening downturn in manufacturing and a cooling uptick at service providers”.

Scotland had recorded the second-fastest employment growth among the UK nations and regions in October.

Judith Cruickshank, who chairs Royal Bank’s Scotland board, said: “The Scottish private sector remained on a growth path towards the end of 2024, buoyed by the robust performance of the service sector. Activity growth remained commendable, and the recent downturn in new orders showed signs of stabilisation.

“Additionally, the latest survey period recorded job gains, predominantly concentrated within service firms.”

She added: “However, the manufacturing sector, which remains firmly entrenched in contraction, continues to present challenges for Scotland. Furthermore, the latest data revealed a notable intensification of price pressures, which have risen at rates exceeding their historical averages. These escalating inflationary pressures could pose headwinds to growth, particularly as confidence levels retreated further in November, hinting at a potentially more subdued outlook on the horizon.”