PMI: Scottish firms report jobs boost in June Published duration 8 July 2018

image copyright Getty Images

Scottish firms took on staff at the fastest rate for nearly four-and-a-half years last month to cope with a rise in new orders, according to a survey.

Royal Bank of Scotland's latest PMI indicated that growth in both the manufacturing and service sectors accelerated in June.

Respondents linked the upturn to an increase in new sales.

The survey of purchasing managers suggested employment expanded at its quickest pace since February 2014.

RBS said the rate of job creation "noticeably" outpaced that for the UK as a whole.

The PMI index increased from 53.7 in May to 54.5 in June - the strongest expansion in Scottish output since August 2014. Any figure above 50 suggests expansion.

However, the growth in business activity was weaker than that seen for the UK for the first time since March.

Nonetheless, backlogs of work were accumulated for the first time in three-and-a-half years, despite the larger headcount across the Scottish private sector.

Increased labour costs were reported to have intensified cost pressures. That said, output prices were raised "to a softer degree", according to RBS.

image copyright Getty Images

Malcolm Buchanan, chairman of the RBS Scotland board, said: "Private sector output growth continued to gather momentum as the second quarter ended, with the pace of expansion quickening for the third straight survey to reach a 46-month high."

"Indeed, operating conditions remain robust, with strong new order inflows encouraging businesses to hire extra staff to the greatest extent in almost four-and-a-half years.

"At the same time, panellists indicated that higher employment had contributed to another month of sharp input cost inflation, adding strain to profit margins."

The PMI is compiled by IHS Markit from responses to questionnaires sent to a panel of about 500 manufacturers and service providers.