RE: Lloyds11 Jul 2022 08:40
Royal Bank of Scotland PMI®
Private sector output increases at slowest rate for five months
• Business activity growth moderates further in June
• Price pressures remain intense
• Business confidence slumps to 20-month low
Scotland’s private sector economy remained in expansion territory for the sixteenth month running during June, according to the latest Royal Bank of Scotland PMI® data, but growth momentum eased for the second straight month. The seasonally adjusted headline Royal Bank of Scotland Business Activity Index - a measure of combined manufacturing and service sector output - posted 54.4 in June, down from 55.9 in May, to signal the softest expansion in business activity across Scotland since January. In addition, new orders rose at a modest pace that was the weakest seen in the current 15- month sequence of expansion. While ongoing recovery from COVID-19 continued to boost activity, concerns over rising costs and an economic slowdown pushed business confidence down to a 20-month low.
New orders continued to rise across Scotland's private sector during June. However, trends diverged at a sectoral level, with manufacturing firms reporting a faster reduction in factory orders, while service providers reported a modest expansion in sales. Overall, new business increased at the weakest rate for 15 months and only slightly. Anecdotal evidence indicated that continued recovery from COVID-19 and new client wins drove the latest increase, but there were also reports of market conditions starting to soften and some clients cutting back on expenditure due to rising costs.
Business confidence at Scottish private sector firms remained strong in June. Businesses anticipate that a robust post-COVID-19 recovery will boost market and economic conditions, allowing for further expansions of output in the coming 12 months. That said, the degree of optimism slipped to a 20-month low in June amid concerns over the cost of living, a possible slowdown in the economy and housing market, and weaker customer confidence.
Optimism across the Scottish private sector was also weaker than that seen across the UK as a whole.
https://www.pmi.spglobal.com/Public/Home/PressRelease/93045e665bec4851901074253d32ebe1
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